The human rights responsibilities of multinational pharmaceutical firms in host nation states (2012)

The human rights responsibilities of multinational pharmaceutical firms in
host nation states
Veronika Valdova, DVM
Abstract
Pharmaceutical industry has long been recognized as one of strategic industries, both in terms of
countermeasures in case of public emergency and in terms of dependency on a strategic
commodity. Policy relating to the need to improve efficiency and cost, speed up development of
new drugs, and the risks of strategic dependency remains highly inconsistent in the U.S., whilst
in the UK both industry and government administration unanimously prefer outsourcing of vital
industries to a strategic competitor for business and cost-saving reasons. Pharmaceutical
industry is highly regulated, and ethical codes are in theory legally binding worldwide. Cost-
cutting efforts resulted in mass outsourcing of operations to emerging markets, especially to
India. Number of clinical trials conducted in developing countries, especially sub-Saharan
Africa and India skyrocketed. This brings new challenges such as compliance with ethical
standards, as demonstrated on the Trovan case, and quality and transferability of produced data.
Recent disaster in Mexican Gulf and costly industrial disasters which resulted from a failure to
detect a safety signal are used as examples of lessons which can be learnt from different
industries in terms of risk management and mitigation. With regards to management of sensitive
medical data and management of workforce with sensitive skill sets, the industry should learn
from the field of intelligence where the importance of data and personnel security is well
recognized. Historical examples of WW2 Nazi experiments are used to describe malignant client
relationship between medical professionals and a state. Non-compliance with international
ethical standards in medicine and abuse of human rights in countries with less rigorous law
enforcement comes at a cost, and that is fuelling of resentment and conflict. The ways of
improving adherence of non-state actors such as multinational corporations which are not
otherwise subject to international law to international ethical standards in drug testing mainly
include litigation and market exclusion through import bans. Claims under the Alien Tort Statute
are on the increase as well.
Introduction
Pharmaceuticals are a strategic industry and should be treated as such. Trends show that
manufacturing of active pharmaceutical ingredients including many associated services
effectively moved outside the USA and the EU, what not only means transfer of highly qualified
jobs to India and Mexico; it also creates growing dependence of western economies on foreign
supply in a strategic commodity. Outsourcing and off-shoring of key parts of pharmaceutical
industry to areas with less rigorous and less consistent law enforcement is a way of
circumventing industrial and ethical standards, including internationally adopted ethical codes in
medicine, in order to get market advantage in terms of lowering cost of doing business; and it is
currently used as dominant business strategy. Quest for business opportunities in developing
countries is a natural state of affairs, but damage caused by unethical or abusive behavior of a
multinational corporation in a host country can generate lot of anguish among the local
population, and consequently generate resentment and conflict.

Pharmaceuticals as a strategic industry
NSDD 751
: In 1983, the authors of National Security Decision Directive 75 defined some
important economic relationships to then strategic adversary Soviet Union, and this plan won the
Cold War. The directive defines economic strategies as an effort to ensure that the economic
relationship does not facilitate military buildup of a strategic competitor or adversary,
respectively; to minimize the potential for exercising of reverse leverage on Western countries
based on trade, energy, supplies, and financial relationships; and to avoid excessive dependence
which could lead to abuses similar to the Orenburg project. Analogy can be used for any other
potentially or actually adversarial or strategically competitive relationship in any industry, where
excessive dependence increases vulnerability to disruptions of any kind. Even in the most benign
case of dependence on a cooperative competitor, there are no guarantees of undisrupted supplies
caused by external factors, e.g. maritime piracy.
HSPD 212
: Homeland Security Presidential Directive 21 on Public health and medical
preparedness highlights the need to establish a strategic vision how to deal with a catastrophic
health event which would involve tens to hundreds thousands casualties. According to this
directive, which was published in 2007, critical components of public health and medical
preparedness are bio-surveillance, countermeasures distribution, mass casualty care, and
community resilience. Even though the directive was published in 2007, when outsourcing of
manufacturing base of pharmaceutical active ingredients, associated services, and R&D, was
well under way, this problem was not dealt with by consequently introduced legislation which
was meant to implement this directive.
HSPD 183
on Medical countermeasures against WMDs lists the need to “target threats that have
potential for catastrophic impact on our public health and are subject to medical mitigation, and
yield a rapidly deployable and flexible capability to address both existing and evolving threats as
two of four main objectives articulated in the National Strategy to Combat Weapons of Mass
Destruction and Biodefense for the 21st
Century to ensure that our Nation's medical
countermeasure research, development, and acquisition efforts.” This definition does not mean
approval of systematic efforts of the industry to outsource manufacturing, associated services,
including processing of highly sensitive patient’s data, and including R&D, to the opposite side
of the globe, and especially not to strategic competitors.
RISC, SIES, and offsets: The UK Security and Resilience Industry Suppliers’ Community
(RISC) defines the industry contribution to the Strategic defense security review in “enhancing
the country’s overall security and resilience” 4
, and lists improved efficacy through outsourcing
and increased international cooperation and influence among top five priorities for UK business5
.
On the other hand, the U.S. Office for Strategic Industries and Economic Security (SIES) in their
Analysis of Technology Transfers provide interagency policy review regarding transfers of R&D
and technology critical to maintenance of national security to China, in which they reveal formal
and informal ways in which Chinese officials use the leverage of their vast market potential to
obtain industrial, technological and economic benefits from foreign investors6
. As per section
309 of the Defense Production Act on offsets, some pharmaceuticals with sensitive dual use, e.g.
biological toxins, can also be subject to the Wassenaar arrangement.7
Centad study8
: From study Competition Law and Indian Pharmaceutical Industry published by
Centad it is obvious that such commercial “offsets” are a market-distorting trade practices are not

limited to the Chinese market. India is the biggest emerging market in the pharmaceutical sector,
and the biggest problem perceived by Indian Ministry of Pharmaceuticals is increasing pressure
from European and U.S. jurisdictions and insufficiently scrutinized anti-competitive practices.
Indian share in global market in pharmaceuticals has been steadily increasing since 1990’s. This
is partially due to outsourcing of vital technologies from developed markets in attempts to save
costs. The market share of Clinical research organizations increased from 2000 to 2010 increased
1000-fold9
.
MISG10
: In 2001, the UK Department of Health established the Ministerial Industry Strategy
Group which in 2005 defined a long-term leadership strategy. In 2007, the group published a
landmark document on cooperation between the industry and the government in which they
expressed the need of cooperation between the industry and NHS to improve cost-effectiveness
of health care and development of new drugs, strengthening of environment for pharmaceutical
industry in Europe, and improvement of regulation in the UK and Europe. The paper also
pointed out emerging competition from India and China especially in generics.
In short, pharmaceutical industry has long been recognized as one of strategic industries, both in
terms of countermeasures in case of public emergency and in terms of dependency on a strategic
commodity. Stagnation of innovation within pharmaceutical industry caused by negative impact
of organizational entropy, frequent mega-mergers which bring uncertainty and organizational
changes, avoidance of risk, and the culture of making decisions within a committee and never
individually, is creating a need within the industry to do “something” what will boost the
industry ability to develop and bring to market new drugs faster11
.
Crisis in drug development leads to profound changes in the industry. Outsourcing and off-
shoring became the dominant business strategy, which is challenged by very few people who are
not listened to. Policy relating to the need to improve efficiency and cost, speed up development
of new drugs, and the risks of strategic dependency remains highly inconsistent in the U.S.,
whilst in the UK both industry and government administration unanimously prefer outsourcing
of vital industries to a strategic competitor for business and cost-saving reasons.
Ethical standards in medicine
In 1803, English physician Thomas Percival promulgated a code which directly dealt with
human experimentation, and was skewed towards the interests of physicians and experts. The
first American code of ethics dealing with experiments on humans was written by William
Beaumont in 1833. In the difference from Percival, Beaumont recognized the necessity of
voluntary consent and required the experiment to be stopped when the subject becomes
dissatisfied or distressed. In 1865, French physiologist Claude Bernard published his own code
which precluded any experimentation on human subjects which would not benefit the subject no
matter its value to science.12
Since WW2, international community adopted series of ethical
codes which are in theory legally binding worldwide. Although some of the guidelines in theory
apply on in the USA, in practice they are generally accepted by the industry because few
businesses wish to risk to exclude themselves from access to the U.S. market. Practical
consequences of this global enforcement of U.S. standards are FDA subsidiaries in India.13
In November 2011, a series of articles published in the Independent and elsewhere, revealed
major violations of human rights of vulnerable populations in developing countries, namely

India, by multinational pharmaceutical corporations. This practice was not limited to just one
firm and rather than a few excesses it showed a trend. In 1996, during a bacterial meningitis
epidemic in Kano, Nigeria, Pfizer tested a drug Trovan (trovafloxacine mesylate) and received
FDA approval despite multiple violations of ethical standards. The drug became a top seller but
later the FDA reviewed the data and revealed multiple inconsistencies, and participants brought
the case to the U.S. Court under Alien Tort Statute (Abdullahi v. Pfizer). This landmark case
shows challenges in enforcement of international standards in clinical research conducted in
developing countries. Characteristic feature of these abuses is that they are conducted by non-
state actors (multinational corporations) with no or limited interference from national authorities
in order to protect their own populations, or in worse case with their full approval; and that the
victims of these experiments or medical malpractice tend to seek justice outside their respective
national judicial systems.
In popular surveys, pharmaceutical industry is perceived almost as sinister as illegal arms and
narcotics trade. Non-consensual clinical research is a gross violation of human rights covered by
multiple internationally adopted norms including Article 7 on torture. It is worth remembering
the most important internationally adopted norms in medical research, and their genesis:
The Nuremberg Code14
was adopted in 1947 as a reaction to WW2 medical experiments on
ethnic minorities, predominantly Jews and Gypsies, and other undesirables. The first point states
that the principal condition for ethical conduct of biomedical research is “voluntary consent”,
what means that the person giving consent has to have legal capacity to do so and to be able to
exercise free power of choice without any involvement of element of force, fraud, deceit, duress,
over-reaching, or other ulterior form of constraint or coercion, and should have sufficient
knowledge and understanding of the research. The experiment should be fruitful in nature and
tests on animals should predecease any experiments on humans. Any unnecessary suffering, both
physical and mental, or injury should be avoided. Proper preparations and adequate facilities are
essential to protect the subject against injury, disability, or death, and persons conducting the
experiments have to be scientifically qualified. The subjects of research should be at liberty, and
have the option to cancel their free consent at any stage of the experiment.
The Declaration of Geneva15
adopted by the 2nd
General Assembly of the World Medical
Association in 1948 is a pledge taken by a graduate being admitted as a member of the medical
profession. Physicians are not supposed to take into consideration age, disease, disability, creed,
political affiliation, ethnic origin, nationality, race, sexual orientation, or social standing; and use
their medical knowledge to violate human rights and civil liberties.
International Code of Medical Ethics16
was adopted by the 3rd
General Assembly of the World
Medical Association in London in 1949. Among other duties, it highlights respect to the patient
and the right of a competent patient to accept or refuse treatment. The last paragraph points out
the physician’s duty to respect local and national codes of ethics.
The Declaration of Helsinki17
, adopted by the World Medical Association in 1964 defines rules
for medical research, introduces the ethics committee (article 25), and the responsibility of
publishers to make sure contributions do not violate ethical principles of research. Special
attention is paid to those who cannot give consent themselves, to vulnerable groups, and to those
for whom research is combined with care.

In 1966, the International Covenant on Civil and Political Rights18
was adopted by the General
Assembly to give the Universal Declaration of Human Rights legal as well as moral force.
Article 7 states: "No one shall be subjected to torture or to cruel, inhuman or degrading
treatment or punishment. In particular, no one shall be subjected without his free consent to
medical or scientific experimentation".
The Belmont Report19
is a guideline produced in 1979 by the National Commission for the
Protection of Human Subjects of Biomedical and Behavioral Research which was created in
1974 as a reaction to abuses which occurred on American soil, namely the Tuskagee syphilis
study (1932 to 1972) in which natural course of untreated syphilis was studied on black males20
,
Willowbrook State Hospital hepatitis study (1955 to 1970) in which mentally disabled children
were infected with hepatitis virus21
, the Laud Humphrey tearoom sex study where the researcher
studied demographic characteristics of participants22
, and the Brooklyn Jewish Chronic Disease
hospital study (1963) in which the researchers injected cancer cells to 22 debilitated patients to
study immunologic response23
. The Belmont report defines boundaries between biomedical and
behavioral research, assessment of risk-benefit criteria, guidelines for the selection of subjects,
and nature and definition of informed consent in various research settings. Basic ethical
principles are defined as respect for persons, beneficence, and justice. With regards to the
informed consent, it highlights information, comprehension, and voluntariness. The most
important provision of the Belmont report compared to some other guidelines is that informed
consent is required even from people with limited comprehension. The third party acting on the
person’s behalf is the one which is most likely to act in the patient’s best interest in case of
complete incompetence. Thus, the Belmont report does not expect transfer of decision-making
on behalf of the patient with limited comprehension ability to the ethic committee or the
institutional review board. In the part on risk-benefit assessment, the Belmont report also takes
into account other types of harm resulting from research such as social, legal, and economic
consequences of participation in research. Many believe that this guideline is only binding in the
U.S., and cannot be extended to corporations based in the U.S. conducting research abroad.
Resolution 37/194 - Principles of medical ethics relevant to the protection of prisoners against
torture24
which was adopted in December 1982 by the General assembly of the United Nations
bans any participation of medical personnel in torture and cruel and inhumane treatment of
prisoners and detainees, including public emergencies. In the post-WW2 era, clinical research in
prisons skyrocketed, and by 1969, 85% of new drug approvals in the USA were obtained through
testing of drugs on prison populations. These tests included also dioxins (Dow Chemical
Corporation, 1965-66), psychological warfare agents, injection of live cancer cells, and tests with
radioactive isotopes. There is an ongoing discussion on possible relaxation of rules in favor of
participation of prisoners in biomedical research (Hoffman, 2000)25
. On the other hand, Reiter
(2009) argues that the current conditions in U.S. prisons provide no guarantees that ethical
standards in research would be met, and that experience with federal sponsored research in pre-
1976 era which had no therapeutic purpose and caused permanent health damage to the research
subjects should always be remembered in these debates26
. Obasogie (2010) examined changes to
45 C.F.R. § 46, Subpart C proposed by IOM Committee and commented on shifts in IOM
policy from categorical exclusion of prison populations from biomedical research to more
permissive benefit risk assessment. Even though pharmaceutical industry was not part of the
review process, it is a matter of fact that access to over two million inmates would be very

convenient in a situation when the single most important problem in clinical research is
recruitment of research subjects27
.
Directive 2001/20/EC28
of the European Parliament and of the Council of 4 April 2001 on the
approximation of the laws, regulations and administrative provisions of the Member States
relating to the implementation of good clinical practice in the conduct of clinical trials on
medicinal products for human use implements the rules for conducting clinical trials in law.
International Ethical Guidelines for Biomedical Research Involving Human Subjects29
were
published by CIOMS in Geneva in 2002. The guideline discusses in detail scientific validity of
research, the role of ethical review committees, and specifies in detail informed consent given by
the patient. Special attention is paid to populations with limited resources (poor and third world
countries) and vulnerable groups. The guideline also acknowledges the right of injured persons
to compensation and treatment.
Guidelines for the Conduct of Research on Human Subjects30
at the National Institute of
Health define historical, legal, and ethical foundations for NIH policies and procedures; human
research protection program, and discuss in detail responsibilities of the Investigator and the
Institutional Review Board.
45 CFR Part 46 Protection of human subjects31
is a federal law effective since June 2005. This
policy applies to all research involving human subjects, including any research conducted by
federal civilian employees or military personnel. It also includes research conducted, supported,
or otherwise subject to regulation by the federal government outside the United States. This is
interesting to know with respect to material published by the National Academies Press which
describes the rights of subjects involved in field testing in the military, including training32
. As
per §46.122, federal funds administered by a department or agency may not be expended for
research involving human subjects unless the requirements of this policy have been satisfied33
.
Recent examples of major violations of ethical standards in medicine
Multinational pharmaceutical corporations outsource their operations including R&D to
territories where ethical codes in medicine are less likely to be enforced in full by authorities of
the respective host nations. This behavior of multinational corporations is in accordance with
individual motivators and perception of benefit in terms of market approval and profit and risk
associated with business loss resulting from attempts of trial participants to hold the corporation
accountable for violations of ethical guidelines. According to industry estimates, it takes 4,000
human subjects enrolled in 65 separate clinical trials to bring a single drug to market approval;
and the total number of patients for eligibility screening is about 100,000. As argued by Khan
(2008)34
, people in the industry are only being human and respond to structural incentives that
exist. The same is true for foreign participants in clinical trials who often agree to participation in
a clinical trial not as an alternative to a proven therapy but the only treatment option available to
them because of limited or no access to proven therapy due to financial and other constraints.
The FDA has obligation to ensure that drugs on the U.S. market are both safe and efficient and
has the right to access data from trials conducted abroad to be able to validate them. In theory,
FDA does not have administrative rationale for protecting foreign test subjects, as long as the
safety data submitted with new approval applications is valid. In fact, one of the conditions is

that the trial participants are treated at least to the Declaration of Helsinki standard or national
standard, whichever offers higher protection to subject participants. Enforcement of these
standards is then left to the national governments; FDA only requires access to the data once the
tests are complete. The fact that national governments in developing countries do not take the
necessary steps to prevent exploitation of their own populations by multinational corporations
opens gates for large-scale abuse of human rights of host nations’ populations.
The Trovan case: In 1996, there was an outbreak of bacterial meningitis in Kano, Nigeria. Pfizer
used this opportunity to move in and conduct a study with their drug Trovan (trovafloxacine
mesylate) to get approval for oral treatment of bacterial meningitis in children. The Infectious
Disease Hospital in Kano let Pfizer doctors have their best beds for the experiment, and even
allowed hospital doctors to work for Pfizer during the epidemic at time when some patients were
accommodated in tents outside. Research subjects were left ignorant about the risks of
participating in the trial and instead of proven therapy (intravenous antibiotics, in this case
chloramphenicol) they only received study medication they knew nothing about. In addition,
control group only received lowered dose of ceftriaxone which would make the study drug look
better in comparison. As a result, 11 of the study participants died (5 from the Trovan group and
6 from the ceftriaxone group), and many others were left severely disabled. The drug was banned
in Europe but received FDA approval for adults in emergency care only and became a top seller
during the first year. FDA inspection then revealed inconsistencies in the Kano trials, including
forged consent forms and approval of a hospital ethics committee which did not exist at the time
when the trial was started. What followed is an interesting account how the victims attempted to
hold Pfizer liable for deaths and disabilities resulting from violations of international ethical
standards because they used Alien Tort Statute to bring the matter to the U.S. Court.35
Trials in sub-Saharan Africa: Only a small minority of clinical trials (16%) conducted in sub-
Saharan Africa comply with the standards set by the Declaration of Helsinki (Khan 2008). As per
Lema at al (2009), guidelines for obtaining informed consent in sub-Saharan Africa are difficult
to implement because of low literacy levels, language barrier, and for socio-economic and
cultural factors and therefore the consent obtained is not always truly informed and truly
voluntary. In addition to that, ethics committees are “weak, ill-equipped, or non-existent”. To
make things even worse, clinical trials represent the only access to health care services.36
Indian trials: Recently, The Independent published a series of articles on violations of human
rights of participants in clinical trials in India37,38,39,40,41.
The articles pointed out high mortality
among subjects of these trials, unethical ways of obtaining informed consent from people
receiving experimental treatment, and coercion based on limited availability of alternative
treatment. On some occasions, patients were not informed at all about the fact they are enrolled
in a clinical trial. In 2005, Indian authorities relaxed regulations of clinical trials, and since then,
more than 150,000 people were involved in at least 1,600 clinical trials conducted on behalf of
multinational corporations. Dr. Chandra Gulhati, a retired physician who edits the Indian
Monthly Index of Medical Specialties, has been collating data from across the country on trials
for more than ten years. Director of Sama resource group for women N Sarojini stated that “there
were ethical violations at every level, caused by lack of accountability, monitoring, and
regulation”. As per Business standard42
, of the 120-plus CROs, only about 20 comply with the
ICH and WHO Good Clinical Practice standards. In India, relaxation of national regulations and

lack of enforcement of ethical standards led to large-scale abuse of local population for medical
experiments by multinational corporations.
Vulnerable populations: People who are most likely to become subject to non-consensual
experiments or as organ donors due to lax enforcement of human rights of subjects in host
countries are those at the bottom of economic and societal ladder: the poor, immigrants,
orphans43
, homeless victims of recession, the insane, prison populations, and people with no
health insurance who have limited access to health care. This list is by no means limited to
developing countries. To make things even worse, in some cultures, orphans and people left
behind by their communities and families have no value and can be treated as disposable. From
corporate risk-management point of view, mistreatment of a person with no family is a low-risk
business because even in case of death there is nobody out there who is going to ask any
questions.
Quality of data vs. compliance with ethical standards: Centre for studies of ethics and rights
concluded that clinical trials in India violate both national and international ethical standards.
Placebo-controlled trials are not banned and existing regulatory apparatus permits unethical trials
which are of no benefit to Indians. Most importantly, as per this report, there is no evidence that
government policy permitting such unethical trials will change in the future; on the contrary, the
government priority is, apparently, to ensure that clinical research in India produces good quality
data according to Good Clinical Practice Guidelines. Ethical guidelines, including its own, seem
to be of secondary importance44
.
Attempts for global enforcement of ethical standards in medicine
Pharmaceutical and health care industries have high potential for abuse of human rights; firstly
for clinical research, and secondly for non-cadaveric organ transplantations from victims of
human trafficking. International enforcement of ethical standards in clinical trials remains a
problem of national sovereignty. If national governments do little or nothing to enforce the
standards at national level, the remaining options available to the victims are very limited.
Victims of the Trovan study from Kano brought the case to the U.S. Court under the Alien Tort
Statute. ATS is a centuries old clause intended to allow foreigners access to U.S. courts in case
of violation of international norms and treaties signed by the U.S. A private individual can be
held liable under the ATS if it acted in concert with the state, i.e. under the color of law. The
plaintiffs alleged that the Nigerian government did exactly that and was intimately involved in
the experiments, because some hospital doctors worked directly for Pfizer and one Nigerian
judge was later dismissed for accepting bribes. As per the plaintiffs, Pfizer violated CUTPA
(Connecticut Unfair Trade Practices), CPLA (Connecticut Product Liability Act), and the ATS
(Alien Tort Statute). Claims were dismissed on grounds of both failing to state an actionable
claim and forum non-conveniens. On this case, Khan (2008) presented limitations of the use of
ATS for enforcement of international standards for foreign subjects and wondered what more
evidence would the court require to accept the argument that the state acted in accord with a
private corporation; and argued that soft-law techniques and market exclusion would be much
more effective.45
The court decision not to support claim against nonconsensual experimentation on foreign
subjects by a private corporation under ATS is further examined by Faulk (2009). Claims under
Alien Tort Statute continue to proliferate and the cases filed range from victims of Agent Orange

from Vietnam War to under-aged camel jockeys in UAE. Globalization is a worthy goal for
most, especially for businesses seeking to take advantage of emerging markets, but as argued by
Faulk, global opportunities can easily turn into global liabilities because of expansive use of ATS
by increasingly internationalist U.S. district courts. This clause was not widely used until the
Filartig v. Pena-Irala case in 1980's and the Sosa v. Alvarez-Machain case in 2004. The main
questions as presented by Faulk are whether the law applies extraterritorially, whether the
plaintiffs should be required to exhaust local remedies, and whether corporations as non-state
actors can be held liable for aiding and abetting human right abuses perpetrated by foreign
governments.46
Ghatan (2011) recommends mandatory exhaustion of local remedies as it would
further remove district courts from involving themselves in U.S. foreign policy, which the
Supreme Court provided as a reason for courts to proceed with caution in ATS cases.47
Though corporations are capable of interfering with wide range of human rights, international
law has failed to address the conduct of non-state actors and remained state-centric. Whilst
individuals have rights under the international human rights law and obligations under the
international criminal law, legal status of multinational corporations only recently shifted to
some extent so they are now considered bearers of duties under international criminal law.
Corporations have continued growing in size, geographical spread, economic power, and
political influence, and therefore can no longer remain on legal periphery (Duruigbo, 2008). This
paper was published just a few months before the collapse of Lehman Brothers.48
Loss of trust as consequence of unethical behavior
The role of culture: Among other factors, culture and mindset depends on to what extent ethical
principles were taught at medical schools or other equivalent training. In some jurisdictions,
international ethical codes are not considered legally binding, and therefore syllabus does not
include them to the same extent as in western medicine. Awareness of origin of these norms is
steadily declining, too, and many people from non-European or U.S. background are unable to
link origins of the Nuremberg Code to the Nazi experiments in concentration camps in Europe
during WW2. Experiments on prisoners of war performed by the Imperial Japan during the
WW2, including Units 731 (Harbin), Tama Unit in Nanjing, and others49
; Nuremberg trial with
Nazi war criminals50
(the Doctors’ trial); Tokyo trial with Japanese war criminals; and existence
of KGB laboratories for development of poisons51
and experiments on prisoners of war
conducted during the Korean War52
are considered a minority topic for academic historians and
no longer common knowledge among medical professionals. Information about ethnic cleansing
and extermination of large subgroups of population can offend minorities; and youngsters shall
not be exposed to these ugly images to make sure their feelings don’t get hurt. This is especially
true among people of Asian descent. This is a factor which should not be overlooked, as Indians
are getting disproportionate share in the pharmaceutical industry due to popularity of medical
science as a result of high cast status of health care professionals. To have a bunch of people
with corporate-paid school “focused on marketable skills” and corporate-sponsored working visa
that are blissfully unaware of the nature and consequences of medical experiments conducted by
Nazi Germany and Imperial Japanese Army running clinical trials in developing countries from
headquarters near London is a nightmare scenario, and not a hypothetical one.
The role of corruption: Corruption is not endemic to developing countries. Former Chief of
Czech Central Bioethical Committee Jan Payne53,54
in a discussion What is corruption and why it
is not ethical which took place in November 2011 at the U.S. Embassy in Prague stated that

international ethical codes do not apply in the Czech Republic; and as bare recommendation they
cannot be enforced. Jan Payne refused to be more specific as he is “a philosopher and not a
lawyer”. In his lecture he only discussed theoretical aspects of ethics and completely avoided any
practical application of international and EU standards to which the country in theory should
adhere. Dr Jiri Payne55
, advisor on foreign affairs to the President of the Czech Republic,
introduced his brother Jan Payne with a statement that people need a reason to act ethically; and
drew a link between atheism and corruption as a result of general cynicism; and stated that lack
of law enforcement makes any efforts to uproot corruption in society illusory. Dr Jan Payne’s
business is ethics and philosophy in medicine, and here their interests met. In the beginning of
his lecture, Jan Payne referred to our brief discussion before the event and stated that ethics in
biomedical science is completely different from law because there are no sanctions enforcing
ethical behavior; and the only consequence is therefore long-term loss of trust:
“Mutual trust is essential for any type of contract. If the two parties do not trust each other,
there is no agreement possible. People have to decide to trust others and not wait for the others
to start behaving ethically. 56
”
This is an interesting point as it shows the long-term consequences of non-ethical behavior for
societies: there is no business possible if people lose elementary trust in others. In broader terms,
this lack of trust can be extended to Armed forces and all sorts of other public services as well.
Without trust, no agreement can be reached, and nobody is eager to join the service. This the
situation in Czech Army, which finds it difficult to find enough people; and even those, who are
already in, are very reluctant to participate in anything dangerous. This paragraph from book
Strategic Leadership and Decision Making, on Values and Ethics, as published by the National
Defense University describes it best:
“When soldiers may be called upon to expose themselves to mortal danger in the performance of
their duty, they must be absolutely able to trust their fellow soldiers (to do their fair share and to
help in the event of need) and their leaders (to guard them from unnecessary risk). So the Army's
values prescribe conditions that facilitate trust, a necessary element in willingness to face
danger. Without trust, risk tolerance will be low, as will combat effectiveness.57
”
Way of the least resistance: Authoritarian governments are usually allowed to do with their own
populations whatever they feel like as long as they do not threaten their neighbors and do not
become direct threat due to acquired nuclear capability and similar concerns. The boundaries
within globalized business world are not political but financial and legal. There are no physical
barriers preventing money from flowing into dangerous and politically unstable regions. To
expect small states with corrupt, weak and shaky governments to protect interests of their
populations against multinational corporations seeking opportunities arising from the very fact
that these governments are corrupt, weak and shaky is illusory. As a result of complete loss of
trust in ability and willingness of national governments to protect interests of their subjects,
victims of human rights abuses perpetrated by a private entity attempt to transfer their claims to
jurisdictions where they are more likely to succeed. It is very concerning to see that as a result of
total failure of national institutions in their respective home countries to address these human
rights abuses victims of non-consensual experiments turn not to International Criminal Court or a
similar institution but attempt to file claims in the USA under ATS as their best bet.

The case for learning from other industries in pharmaceutical risk management
The need to restore public trust: The group proposes Guiding Principles of Safety of
Pharmaceuticals in order to reform pharmaceutical development and restore public trust. This is
becoming a serious problem because according to popular surveys, pharmaceutical industry is
perceived by majority of respondents as almost as sinister as arms and illicit drug trade. Reliance
on regulations alone will not work, as the core requirement is to change safety culture. As per
Edwards and Strickland, fairness in the system which is essential to restoring public trust to
provide safety is not just confined to patients, but extends to all stakeholders, such as sponsors;
and the “safety case” should be adopted to produce greater transparency in the outsourcing
process to ensure the same safety criteria have been applied.58
Relaxed regulations in India in
2005 led to mass outsourcing of clinical trials to Asia. It would be great to know that U.S. And
EU agencies are not going to turn blind eye to violations of human rights in developing countries
because this ignorance is likely to backfire.
Pharmaceutical “exclusiveness”: Catastrophic failures occur in all industries, as documented on
the examples of Chernobyl (1986), Three Mile Island (1979), David-Besse facility (2002), and
Fukushima nuclear plant disaster (2010); Bhopal methylisocyanate leak (1984), major aviation
accidents, or even collapse of a major financial institution such as Lehman Brothers (2008).
Accident of shuttle Columbia (2003) and major blackout which affected large areas in north-
western USA (2003) led to establishment of an engineering committee which in detail
investigated accident precursors and organizational capacity to detect them and mitigate the risk
of a major failure59
. Final reports compiled by investigation boards can serve as a useful way of
learning from other industries in order to implement necessary changes where needed. Brian
Edwards, in his series of articles on ethics and risk management in pharmaceutical industry, calls
for implementation of safety and risk-management standards from other industries such as
aviation and nuclear facilities. The authors use Chernobyl nuclear plant disaster and aviation
industry60
as examples of positive change towards safety culture within the industry initiated by
major failures, and argued that it is very unwise to wait for a major failure as an impulse for
implementation of fundamental changes within the industry61
. As per EU inspectors, critical
inspection findings are defined as a deficiency in pharmacovigilance systems, practices, or
processes that adversely affect the rights, safety, or well-being of patients or that poses a
potential risk to public health or that represents a serious violation of applicable legislation and
guidelines. So there is a need to understand the science behind what constitutes such a system,
and ethical approach to practically implement such a system and underpin the decisions about
benefit and risk62,63
.
Lessons from Texas City Refinery & Macondo Well accidents: In recent years, several major
industrial disasters caught attention of the public because of large-scale damage they caused.64
Investigation report issued by BOEMRE states that flowing hydrocarbons fueled a fire on the rig
that continued to burn until the rig sank on April 22; eleven men died on the Deepwater Horizon
that evening; and over the next 87 days, almost five million barrels of oil were discharged from
the Macondo well into the Gulf of Mexico. The blowout at the Macondo well was the result of a
series of decisions that increased risk and a number of actions that failed to fully consider or
mitigate those risks65
. Panel found no evidence that cost‐cutting and time‐saving decisions were
subjected to formal risk assessment processes that BP had in place66
. Since 2008, performance
evaluations reflected cost‐cutting focus, whilst there was no comparable performance measure

for occupational safety achievements67
. On the day of the blowout, a BP contractor suggested
making an additional wash run due to his concerns about achieving a successful lead impression,
but his request was rejected that the team won’t be able to justify the expense68
. An audit in
March 2010 discovered that there was a difference in awareness of hazards clearly demanded
attention, as frontline crews were potentially working with a mindset that they believed they
were fully aware of all the hazards when it is likely that they were not. If a crew is not aware of
risks and hazards, it is less likely to be able to recognize unsafe situations and will not take
immediate actions to mitigate risks69
. BP, Transocean and Halliburton each had “stop work”
programs. The Panel found no evidence to suggest that the rig crew members were aware of the
multiple anomalies that occurred on April 19‐20. The failure of the rig crew to stop work after
encountering multiple hazards and warnings was a contributing cause of the Macondo blowout70
.
In the critical period, multiple documents were never officially completed due to a “clerical
error.” Contributing causes of the disaster were BP’s failure to have full supervision and
accountability over the activities71
; and their failure to document, evaluate, approve, and
communicate changes associated with Deepwater Horizon personnel and operations72
. In this
context, it is worth remembering another accident, the Texas City refinery explosion and fire
which involved the same company, BP, in 2005. The final investigation report73
published by
U.S. Chemical Safety and Hazard Investigation Board in March 2007 discussed in detail the role
of safety culture and regulatory oversight as two of four key issues. As per chapter 9.1, “An
organizational accident”, many of the safety problems that led to the March 23, 2005, disaster
were recurring problems that had been previously identified in audits and investigations74
.
FIG 1: Leading indicators from a variety of industries as reprinted in Luyk, 2011. Leading
indicators are potentially very useful for early warnings, but are difficult to obtain.
Consequently, gaps exist between the current (leading) indicators and early warning signals.
Though this gap exists due to the unknown relation between currently available information (e.g.
originating from an operational process) and the potential occurrence of accidents or other
threats, this gap is also present due to missing information. (Luyk 2011)

Safety culture: Safety culture, risk awareness, and effective organizational safety practices found
in high reliability organizations are closely related; and effective organizational practices, such
as encouraging that incidents be reported and allocating adequate resources for safe operation are
required to make safety systems work successfully are essential in prevention of major
incidents75
. The disaster at Texas City had organizational causes embedded in the BP refinery’s
history and culture, budget cuts in safety and maintenance, and consequent major problems with
mechanical integrity, training, and safety leadership76
. Texas City site was not considered a safe
place to work and as per Telos consultants, people “closest to the valve” were intensely worried
about the occurrence of a catastrophic event. The consultants noted that they had never seen such
a history of leadership changes and reorganizations over such a short period of time that resulted
in lack of organizational stability.77
As per the report, BP Texas City tragedy was an accident
with organizational causes embedded in the refinery’s culture, namely reporting and learning
culture; lack of focus on controlling major hazard risk; attention to personal safety rather than
process safety; ineffective leadership and oversight; inadequate human and economic resources
provided by the management; and failure to effectively evaluate the safety implications of major
organizational, personnel, and policy changes78
. Analysis of root causes blames the BP Group
Board that it did not provide effective oversight of the company’s safety culture and major
accident prevention programs79
.
FIG 2: Rasmussen's Model Showing Three Zones of Risks (Howell et al. 2002): The graph
originally comes from the construction industry and demonstrates safety zones for
organizational operations (Alavi, 2010)80
. The same model can be applied to any safety system,
including data management in pharmaceutical industry. Factors like increased workload, lack of
investment in training, and high staff turnover push behavior of workers outside boundaries of

unconditionally safe behavior, and ultimately toward loss of control. Accident then does not look
like a catastrophic event (e.g. explosion and fire) but e.g. leak of sensitive data81
or failure to
detect serious adverse effect of a medication82
. Both events are similar to catastrophic accidents
due to their impact on organizations because of potential economic loss through litigation and
eventually stock value.
Recruitment bias: Lack of safety culture can predispose systems to failure because of mindset of
its leaders and managers. People with certain behavioral characteristics, namely those who think
critically83
, and question and challenge processes they consider inadequate, are the driving force
within learning societies. Elimination of these “misfits”, “troublemakers”, “originators of
personality clashes” “disobedient employees who cannot understand the meaning of hierarchy”
leads to false sense of comfort within a company, self-assurance that “everything is fine”, and
eventually to accumulation of systemic problems which can lead to a major crisis. This is by no
means unique to business environment. Silberzahn and Jones in their prepared book on strategic
surprises within the CIA pointed out the need to adjust recruitment practices within a large
organization to increase cognitive diversity of their teams.84
Troublemakers as well-recognized risk to business: Pharmaceutical industry in recent years
managed to actively eliminate individuals who tend to challenge the status quo and populate
highly sensitive field by obedient, dependent employees who are more vulnerable to pressure.
This is also the case of people whose working visas are sponsored by the corporation they work
for, because their capacity to say “No” when faced with an ethical dilemma is extremely limited
as a result of their dependent status. Other types of dependency or vulnerability can be exploited
as well. It requires a person with extremely high resilience to resist the demand to “turn blind
eye” to existence or non-existence of specific evidence in a situation of immediate existential
threat. Whistleblowers as a species are outnumbered and outgunned even in the most benign
environments, but in authoritarian societies their occurrence drops to zero. This phenomenon
effectively turns off any remaining self-restraining capabilities within the industry. In
environment where raising a concern results in professional suicide only very few special
characters are willing to ask any questions at all. So there is a well defined interest by a
corporation which wishes to bend the rules to the limits and the need to eliminate critically
thinking and “difficult” employees who are perceived as “risk to business”. Therefore, there
should be an identifiable and quantifiable link between the personal characteristics of workforce
which remained within pharmaceutical industry after the wave of acquisitions, and people who
were eliminated because of their personal characteristics. Elimination of potential troublemakers
reduces the business risk but at the same time reduces the company’s capacity to learn. This
leads to shift in culture and in long term increases the risk of major crisis caused by failure to
detect and act upon safety signals.
Signal detection within organizations
Organizations face two major types of risk which has to be mitigated: operational, which mainly
affects manufacturing, and strategic and financial, which affects all organizations. Definition of
risk shifted from management of unfavorable consequences to those favorable as well, to include
potential business loss as a result of failure to exploit a market opportunity. Increasing product
and process complexity and complexity of a business chain, increasingly dynamic business
environment, and decreased societal tolerance for failure affect trends toward more proactive risk
management. This creates a need to implement validated systems of detection early warning

signals within organizations, and in his thesis discusses in detail the means of maintaining
situational awareness within organizations and effective communication of an early warning
signal from its source via all organizational transmitters, channels, receivers, to the analyst and
decision-makers (Luyk 2011). Current trends in pharmacovigilance show the exact opposite:
fragmentation of data makes effective detection of a signal impossible.
Source: An information source produces a signal or sequence of signals to be
communicated to the receiving terminal.
Transmitter: The purpose of the transmitter is to convert the signal produced by the
source into a form suitable for transmission over the channel.
Channel: The channel refers to the medium used to transmit the signal from transmitter to
receiver. As the transmitted signal propagates over the channel, it is distorted due to the
channel’s physical characteristics, as well as due to noise and interfering signals from
other sources.
Receiver: The receiver performs the inverse operation of that done by the transmitter,
reconstructing the message signal from the source. The resulting estimate of the message
signal is then delivered to the user destination.
Destination: The destination is the person (or thing) for which the message is intended
(Luyk 2011)
FIG 3: The Signal and Noise distributions in signal detection theory. The distance between the
means of the two distributions (d') is the sensitivity. The cutoff point above which the decision
marker indicates that this is a signal specifies the response criterion β. CR stands for correct

rejection (noise) and FA for false alarm (noise incorrectly identified as signal). As per Heinrich
(1931), most industrial accidents are characterized as probabilistic result of human error and a
chance event. According to signal detection theory, probabilistic penalty for miss led to safer
behavior later on through learning. If the same graph is applied to the situation in
pharmaceutical industry, where signal detection “miss” is characterized as failure to identify an
existing risk in clinical trials and the drug receives market approval (= gain), and the drug
makes enough profit until it gets withdrawn from the market (= loss), the delay in feedback in
monetary loss shifts the risk of loss strongly in favor of “miss“ compared to “false alarm” or
even “hit”. Domino model describes conflict between safety and productivity and acquisition of
unsafe habits through flawed or delayed feedback. In addition, most human errors result in
accident only once in every 300 pairings of unsafe conditions and risky act (miss).85
Management of risk of getting caught: Pharmaceutical firms thus take advantage of limited
enforceability of international ethical standards in certain jurisdictions to employ measures such
as outsourcing of manufacturing, associated services, and R&D to third world countries to cut
costs. This behavior is only going to change when this practice becomes too risky for major
stakeholders or when it stops paying off in terms of increased cost of failure. As obvious from
damages claimed by plaintiffs in the case of Mexican Gulf oil spill, as well as criminal charges in
this case, system failure in safety can get a price tag which will have to be taken into account in
decision-making. Risk management is a great concept providing the subject taking a risk is the
same as the subject suffering the consequences of inadequate risk assessment, management, and
mitigation. The minute these two parts get disconnected, disaster is on its way, because the
subject taking the risk managed to keep profit but dispose of liabilities. In environment like this,
corporate moral bearings degenerate to management of risk of getting caught and risk-
assessment to assessment of likelihood of serious legal action.
In a way, industry cannot be expected to do this ethical policing for itself, especially in a
situation of a global economic depression which makes highly skilled people more readily
available. Some of these experts with highly sensitive skill sets in pharmaceuticals are so
desperate for money that they would kill themselves (or somebody else) for a three months
contract just to keep their mortgage running and bills paid. In environment like this, few people
will speak up about “not quite right informed consent forms”, if they know that in case they
challenge the status quo it will be their project getting cancelled and their paycheck stopped.
It is no coincidence that the position of Qualified Person for Pharmacovigilance is frequently
getting outsourced to external contractors who have no idea about the reality of internal company
operations. It is a typical but not the only function when a single person bears criminal liability
for corporate operations as defined in law. Everybody is covered, nobody is liable for anything.
In case of “trouble”, everybody in the evaluation and decision-making chain will produce a paper
that “problem” which occurred was unpredictable and could not have been prevented as
everybody did his or hers “due diligence”. This mutual “hind parts” covering becomes a major
concern as this is the root cause of corporate loss of moral bearings. In environment like that,
nobody is going to blow a whistle, as everybody knows that there is no chance of winning. This
groupthink can only be changed if people in the industry are forced face consequences of their
actions in real time. The only real threat to business is thus represented by U.S. attempts for
extraterritorial application of some criminal laws, claims filed under ATS, FDA determination

not to approve new authorizations which do not adhere to the Helsinki Declaration when treating
foreign subjects of clinical trials, the use of Foreign Corrupt Practices Act, and import bans.
Lessons from intelligence
Data security: The first analogy which comes to mind is similarity of processing of large amount
of data in pharmaceutical and health care industries the same way it is done in the intelligence
field. HSPD 21, Bio-surveillance, article 21, mentions protection of patients’ data as one of the
priorities. We both deal with confidential and highly sensitive material. No intelligence
professional would seriously come up with the idea of outsourcing of processing classified data
to a cooperative competitor, a foreign national who poses a clear security risk, or a potentially
hostile power, just because it is cheaper. Health care professionals in multinational corporations
have absolutely no problem sending highly sensitive medical data including psychiatric files of
diplomatic and military personnel for processing to a firm operated and staffed by foreign
nationals originating from country with which the client’s nation is at war. Security clearance is a
term most health care professionals never heard off. There are no consequences of outsourcing of
processing of sensitive medical data to a politically unstable country, strategic competitor, or
even adversary. Business is business and price is the only thing that matters. Enforceability of
existing standards in data protection and data sharing between different jurisdictions is often
illusory.
No signal, no problem (SIGINT class): Fragmentation and continuous reorganization of
business structure lead to processing safety data at multiple sites, long delays in data processing,
what in some cases can effectively paralyze signal detection. Every SIGINT specialist knows
how important it is to get data in real time from all monitored sources; and that withholding
information by any part of the system can significantly affect results. SIGINT professionals can
easily be transferred to signal detection in pharmacovigilance. Their insight and mindset would
likely cause a revolution in pharmaceutical signal detection as they are used to spotting gaps
when signal is expected but not coming. In pharmacovigilance, absence of signal is not
considered an incident; in fact it is the most desirable outcome. This contributes to a false sense
of security in the absence of signals caused by dysfunctional systems.
FIG 4: Cognitive processing of early warning signals (Lyuk 2011, as reprinted from Wogalter
2006).

Data loss and omission of inconvenient results: Payers and society demand faster access to safe
and effective medicines at rock-bottom prices86
. Popular way of saving money is mass transfer of
clinical trials to less regulated markets, namely Asia, and moving of key parts of businesses and
processes to less regulated environment. Mushrooming of small firms is based on the logic that
small firms have better record in innovation. Major challenge stems from limited transferability
of results from drug-naïve population to population with completely different socio-economic
background. This brings significant advantage in terms of speed of recruitment but may limit the
value of data acquired. But there is yet another elephant in the room which makes data coming
from less regulated markets difficult to trust: publication bias. Trials which do not produce the
right results are simply not presented to the public87
. It takes a specialist on motivated and
unmotivated biases and strategic deception to identify all this data management mischief.
Ancient handbook Psychology of Intelligence Analysis (Heuer, 1999)88
and Moore’s
Sensemaking (2011)89
should become a required reading for the FDA.
Forgotten experts (PERSEC and HUMSEC): Outsourcing among other unintended
consequences takes jobs away from home-grown professionals. Skilled workforce becomes
unemployed, forced into expensive retraining, or forced to leave abroad. This brings a problem
which was so far neglected by the experts and that is the risk that people with highly sensitive
skill sets will take care of their bills and careers the best they can. Experts in various fields can
move relatively freely among markets which in defense sector would not be considered totally
inappropriate. Civilians with no need to renew their clearance can work in countries like Syria
with no problem whatsoever, and there is no law which can prevent them from doing so.
Historical experience with too cozy relationship between medical profession and state
The price of innovation: During the World War II, medical experiments on non-consensual
subjects occurred relatively independently in several different places in the world. The main
impulse to this came from the scientific community itself, and it was the demand for innovation,
the need to prove efficacy of new products before market approval by medical experiment which
requires “material” for testing, and economic need. The habit of using “low-value” humans as
rats in medical research crossed national boundaries and spread like fire. For scientific and
medical community, crossing the boundaries of traditional ethics rooted more in religion than in
legal documents became a necessary price of innovation conveniently paid by someone else. For
emerging authoritarian governments, economic boom resulting from this research was a great
boost which helped financing the rise of Nazism.
Improvement of health of population: At the same time, the added value of “improvement of
overall health and quality of the population” was immediately understood as a great opportunity
to dispose of people who are ill, too expensive to “keep”, the non-productive ones, and most
importantly dissent and political opposition. Spreading of fear of becoming “fodder” quickly
split the society in two camps: executioners and victims. General public did not object as the
benefits of such behavior were easy to explain as beneficial to public health. Statistically, 100
human guinea-pigs would save countless lives if their “sacrifice” was used for example for the
development of a vaccine against a deadly disease. During the Great War, more people died of
the epidemics of Spanish flu in 1918 than of any other cause90
. The total number of WWI combat
deaths is estimated 20 million whilst Spanish flu killed 20 to 40 million people in just one year91
.
Statistically, it is not difficult to justify experiments on a minority to protect majority against a
deadly disease.

Scientist’s mind: Similar atrocities can happen again at any time, providing some basic
conditions are fulfilled within the scientific community itself: The most important condition is
overwhelming sense of impunity of those engaged in these activities. Positive feedback within
the scientific community draws into the pathologic vicious circle even those who would
otherwise prefer to stay away. Dehumanization of certain segments of population helps to soothe
ones conscience in the beginning, whilst later the most important factor could be either
satisfaction rooted in sense of superhuman power, or shared guilt for a crime committed in a
pack. Limited means of defense available to victims and survivors further increase the sense of
impunity. General population is unlikely to openly object, because cheap and readily accessible
new medicines are sufficient reward to keep ones mouth shut.
Relationship between medical profession and state: Professor William E Seidelman in his paper
“Nuremberg lamentation: for the forgotten victims of medical science”92
analyzed the
relationship between medical profession and the state, and the ways this profession entered the
slippery slope of large scale killing of segments of the population and how it became one of the
pillars of a dictatorial regime. The main paradigm of medical practice in Nazi Germany was to
“improve overall health of the nation” by positive selection and removal of those who do not fit
the desired standard. As the interests of an individual who can be disabled, gravely ill, or have
undesired physical or mental characteristics, are in direct contradiction of the “society”, which
only wishes to have people who are healthy, look good, and do not require extensive and
expensive medical care, we have got a serious conflict right here. In section “State misuse of
professional power”, Prof Seidelman defines broader questions and challenges for medical
profession arising from the Nuremberg trial. Apart from the previously mentioned client
relationship between state and medical profession which excludes patient from decision-making
and reduces him to the role of livestock, there are other points which explain the problem more
precisely: the physicians were loyal to the state for political and socioeconomic reasons; and
secondly, the physicians had the right and power to decide whether the person would be treated
or not based on his value for society. The role of physician-teacher and physician-scientist
became a vehicle for profound political and social change.93
Unique social status of doctors: Medical professionals in Nazi Germany became a superhuman
caste of people directly responsible to the National Socialist Party. This is an interesting point as
it shows the unique social status of the medical profession in some cultures. In Communist
countries, becoming a doctor was the highest echelon on the social ladder a commoner could
achieve. This definition of a commoner naturally excluded anyone who would not be considered
politically reliable; however, within the population segment which had “permission to breathe
and make a living” doctors had immense authority, and their skills and intentions were never
questioned. In communist countries, any misconducts, medical errors, lack of judgment or
knowledge, or corruption was always swept under the carpet and in the most atrocious cases any
problematic results were blamed on money but never on lack of skills or even intentionally
caused harm. Laughton (2007) compares tendency to apply the same ethical standards globally to
ethical imperialism. Search for universal principles and desire to prevent exploitation of persons
of developing countries is not always in line with the need for respect for diversity and pluralism.
Universalists call this approach moral relativism and argue that it would be unethical to take
advantage of lower standards in developing countries to perform studies that would be unethical
or impermissible in developed nations. The pluralists or relativists argue that imposing of
western standards on less developed nations is similarly exploitative, because some cultures live

by different values and informed consent is not essential to them94
. In some cultures, medical
profession is exempt from any public scrutiny. This God-like status was taken for granted by the
doctors and created a sense of superhuman powers and total impunity for any shortcomings
within the profession. The same phenomenon can be observed in Indian society due to the
historically ingrained caste system where those who practiced medical profession belonged to the
high classes.
Conclusion
Pharmaceutical corporations operate globally; and due to outsourcing of various tasks to external
contractors and Clinical Research Organizations and conducting the trials on territory of yet
another state, the responsibility and legal liability for violations of international norms is
becoming a complex jurisdictional problem. Liability within a corporation is usually divided in a
way which limits every manager or team leader to his area but the overall responsibility is still
with the senior management. Through production of paper and “documenting due diligence”
individuals cover themselves and each other, and transfer the problem elsewhere either
horizontally or vertically, although not necessarily upwards. Accountability for compliance with
human rights regulations follows the Laws of Conservation of Matter and Energy95
, and
therefore cannot vanish no matter how far it is delegated.
Due to transnational nature of business, the borders between states are blurred, including those
with strategic competitors and adversaries. Many corporations have their operations worldwide,
covering traditional Western democracies, post-communist countries in Europe and Asia, rapidly
developing markets in India and Latin America, and so-called countries with limited resources.
In this environment, global to its core, crossing boundaries faster than any law enforcement
agency would ever do, it is extremely easy to forget about basic principles of humanity. Personal
accountability is limited, committees have their meeting minutes and decision boards, employees
have their contracts limiting their scope and responsibility, and nobody asks for security
clearance, as the industry is not formally a national security concern.
Without national governments turning blind eye to widespread exploitation of their own
population by their own native doctors, not attempting to enforce even the most basic standards,
this widespread abuse of human rights by medical science would never be possible. “In a world
of conflict, a world of victims and executioners, it is the job of thinking people not to be on the
side of the executioners”96
.
Abuse of human rights by multinational corporations in host countries is perceived by the local
population as exploitation, quite rightly, and as such generates lot of anguish. It does not matter
who is to blame in the end, especially in situations when the real problem is local corruption
which prevents national law enforcement actions, outright selling of own population for profit, or
violation of international treaties which are enforced by no one. Even in an ideal case, when the
victims are eventually compensated and the perpetrators found guilty and punished, the delay is
usually too long to affect public perception of the incident. Moreover, in a case of a major affair,
host nation is likely to have unlimited access to national media. No government in the world is
going to admit that root cause of a major industrial disaster is its own incompetence and
corruption. So the damage caused by unethical behavior caused by multinational corporations
can be quite extensive. Thus, abusive behavior of private businesses abroad has to be taken
seriously by the nation where the company has headquarters, because exploitation and abuse

feeds resentment and fuels conflict which the state will have to take care of later on. Any
aftermaths of a major affair are likely to become a problem for diplomatic service and potential
expense for the defense budget.
Acknowledgments
I would like to express my very great appreciation to Ronald Sheckler for his valuable and
constructive suggestions during the research work on this paper and during its review and
amendment. His willingness to give his time so generously has been very much appreciated. I
would also like to thank Brian Edwards for providing copies of his papers and his helpful
remarks during writing and review of this paper. Special thank you also belongs to Ray
Weinstein for his comments and insights.

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Textbooks of physics for high schools
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