A New York Times article by Katie Thomas published on December 16, 2013 led with this sentence: “The British drug maker GlaxoSmithKline will no longer pay doctors to promote its products and will stop tying compensation of sales representatives to the number of prescriptions doctors write, its chief executive said Monday, effectively ending two common industry practices that critics have long assailed as troublesome conflicts of interest.” Might one ask: Are these really conflict of interests problems?
A conflict of interest (so sometimes, conflict of interests) is often defined as: “a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest.” In a short introduction to conflicts of interests, written for a business ethics class at the McCombs School of Business at the University of Texas at Austin, Dr. Lamar Pierce (Associate Professor of Strategy, Olin Business School, Washington University, St. Louis) said:
Incentives are pervasive in every aspect of society. People are rewarded for taking certain actions, and not rewarded for taking others. Workers are paid for their effort and productivity, salespeople are paid for their sales, and small business owners are rewarded with profits for successful ventures. So long as these incentives are well-understood by everyone, they work reasonably well. They motivate effort, performance, and social welfare. But sometimes, individuals have incentives that conflict with their professional responsibilities, often in ways that are not transparent to the public or in their own minds. These conflicts of interest produce serious economic and social problems.
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