Conversely, respondents told of many situations where it was the company which initiated the illegal transaction. Irrespective of the allocation of guilt between the two parties, the point remains that here we are dealing with conduct which cannot be benignly tolerated as 'customary business practice in foreign countries'.
Not all forms of bribery seemed to bother executives in the pharmaceutical industry. It was generally accepted that paying off health inspectors in certain Third World countries was normal and acceptable business practice. However, there was considerable concern over the bribing of government officials to get trade secrets concerning manufacturing processes. Such secrets are necessarily made available to governments for new product approval. Italy was frequently mentioned as the country where such bribes, often of only a few thousand dollars, were passed to the Ministry of Health. Many pirate manufacturers are allowed to operate in Italy in violation of international patent agreements.1 Guatemalan executives also said it was common there for government officials to hand over new drug registration documentation to local firms in exchange for a 'few hundred quetzals [dollars]'. The local firm then submits exactly the same research data on the safety of the drug in order to have its product approved. The product it manufactures, possibly in a bath tub, may bear little resemblance to the product to which the submitted safety-testing data relates. Any set of data which carefully meets all the legal requirements will suffice to get a permit number to print on all bottles. In Guatemala no one is going to check whether the contents of the bottle correspond to the information in the product registration documents. To begin with, the government does not have a testing laboratory.2
Then of course there is the more straightforward kind of industrial espionage where employees sell secrets directly to their company's competitor. On some occasions the crime is in response to a bribe to the spy, and on other occasions the employee initiates the espionage. A disgruntled employee of Merck stole the process for making alphamethyldopa ('Aldomet'), an anti-hypertensive drug. The competitor who was offered the plans turned them down and notified Merck. Most notorious among the pharmaceutical spies was Dr Sidney Martin Fox, a former employee of Lederle Laboratories, the Cyanamid subsidiary. He set up a spy ring which sold microfilm copies of secret documents and stolen cultures of micro-organisms to six Italian drug firms (Davies, 1976). Fox and his associates are believed to have been paid £35,(XX) by one firm alone. Along with five confederates. Fox was convicted and imprisoned under the Federal Stolen Property statute by a New York court in January 1966.
Cyanamid claimed that Fox's defection has cost it 100 m. dollars in lost sales and that it spent 30 m. dollars to develop the stolen process and cultures. In 1962 Cyanamid had won a damages suit against Fox, and the New York Court at the criminal hearing assessed the firm's losses at £1.78 m. (Davies, 1976: 131).
The consequences of these company-against-company crimes are less serious than when consumers are the victims. It is the latter type of bribery which will be the concern of this chapter.
Talking to executives about bribery
I had more difficulty in getting executives to talk about bribery than any other subject. There were a couple of spectacular instances of being evicted from offices when I pushed too hard on this sensitive issue. The first problem was that most respondents genuinely knew nothing about the subject. A quality assurance manager or medical director in Australia or the United States typically leads a sheltered life, moving from office to laboratory to office, with occasional ventures into the manufacturing plant. When I tried to talk to these people about bribery all I achieved was a loss of rapport for the things which they could tell me something about. Experience therefore taught me to limit discussions of bribery to top management, finance, marketing and legal personnel. The public relations staff were also not particularly effusive on the subject.
Even within this select subsample I frequently decided not to raise the ugly issue lest a fragile rapport be shattered. In the early interviews, the subject was broached with a standard line: 'I've read a lot in the newspapers about Lockheed and bribing foreign government officials. Do you think many of your competitors in the pharmaceutical industry engage in that sort of activity?' And I would get a fairly standard answer: 'The pharmaceutical industry deals with serving the public more than any other industry. We're in the business of saving human lives, and that leads to higher ethical standards than you'll find in any other industry.' Alternatively: 'Look I won't deny that there was a time when bribery did go on, but not any more, not the reputable companies.' End of discussion.