Case spotlight: ChekAbuse: The Ethical Challenges of a Family Startup

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This case was featured in Connect, issue 52, June 2021.

Who – the protagonist

Sam McDowell, a renowned oncologist, who specialises in the treatment of aggressive breast cancer cases.

What?

Sam, her son Pat (a marketing specialist in the health insurance industry) and his friend Alex Crowley (a medical school classmate), created ChekAbuse to market Paradone, a revolutionary drug that Alex developed to counteract the insidious scourge of opioid addiction.

Sam was the driving force behind ChekAbuse, as she was determined to redeem her reputation after a devastating scandal in which she failed to report the illegal activities of her colleagues in their medical practices. The doctors in question took bribes to unnecessarily prescribe the opioid fentanyl (which is 50 times stronger than heroin).

Pipette dropping liquid in to test tubes

Why?

A number of issues cropped up to threaten the future of ChekAbuse. 

A not-so-successful second round of trials on Paradone meant the product was in question and the story could be reported by the media imminently. Jordan Stanich, an informal advisor to ChekAbuse, desired a greater equity in the company, with Sam and Pat in disagreement. Most importantly, money was rapidly running out and an unsuccessful third round of Paradone trials would likely amount to ChekAbuse’s death knell.

When?

It was October 2018 when Sam requested a meeting with Pat and Alex to discuss the best way forward for ChekAbuse.

Where?

Sam and Pat were based in Wilmington, Delaware, while Alex lived in nearby Baltimore, Maryland.

In 2018, the opioid epidemic was a national crisis in the US with 115 overdose deaths every day.

Key quote

“For so long, so many people have been suffering from the scourge of addiction. I have seen it first-hand in my home town of Baltimore where there has always been a problem in the inner city. Now, this terrible epidemic has spread to pretty much every corner of the country. It hits rich and poor, black and white, young and old.”
Alex Crowley.

What next?

Sam was ready to meet with Pat and Alex, followed by Jordan and Taylor Reyes (a new part-time hire).

How would the equity be split? Would the third trial be successful? What are the financing options? A lot needed to be discussed.

AUTHOR PERSPECTIVE 

The case for generalised experience

Susan said: “This case was developed from real-life experiences combined with actual events from the news (these events were taken from public sources, specifically on the ethics scandals at Insys and Theranos). 

“I was able to document actual events that I witnessed myself over the course of my teaching and consulting career such as unethical and dishonest discussions and negotiations over equity split for the founders and their initial team, the misrepresentation of events during the start-up phase of the business to investors and the media, and other anecdotes collected through the years. 

“Conducting field research is more time-consuming than drawing from real-life events and then developing a ‘composite’ case based on those events. Data and content from published sources can help fill out the stories to give them additional detail and colour.”

 

Combining field research and published sources

Susan commented: “The ChekAbuse case has two parts so students can get a sense of the constantly developing series of events that take place during the startup phase of a business. 

Line drawn between A and B points

“The case also includes multiple instances of ‘breaking news’ that participants must react to in real time. This makes the case and the discussion more realistic and the longitudinal time element makes the role play more memorable as it best mimics the actual experience of participating in the start-up phase of a business. 

“The ongoing, dynamic nature of the narrative that plays out over multiple cases and the interruptions/surprises inserted into the middle of the role plays makes for a more entertaining, memorable and realistic exercise.”

Family dynamics

She added: “The family business aspect of the case is based on a real-life family business I encountered during the course of teaching entrepreneurship.

“A student of mine was involved in a business with her family and she and the rest of her family described the all-encompassing nature of the business and the effect it has on family dynamics, which is reflected in the case. Younger siblings and others in the family who are not involved in the business feel left out and negotiations with ‘outsiders’ to the family are affected by the emotional nature of the relationships between family members who are involved. 

“In addition, honest discussions around the roles, rewards and responsibilities of the founding team can be adversely affected as family members are often loathe to offend those with whom they have such a close relationship.

“This is also true of close friendships like the one that we see between the two main protagonists in the case, Alex, the scientist who developed Paradone, the addiction treatment drug that is the company’s main product, and Sam McDowell, the physician whose earlier experiences turning a blind eye to colleagues’ corruption around the sale of a highly addictive drug called Languis have propelled her to want to start this company in part to clear her name. When Alex hides a less-than-successful initial trial phase from the rest of the team, or when Sam overestimates her child’s value to the company, the complications of doing business with close friends and family come to the surface in an unforgettable way.”

Consistency across the case

Susan explained: “The main challenge in writing this case and the role descriptions was to achieve consistency across the whole story. The roles and their accompanying emotions, activities and relationships needed to be covered in sufficient detail, as well as cross checking the relationship to ensure accuracy and consistency. For example, if a character is described one way in the case, their personality profile, feelings and thoughts in the role descriptions that each ‘actor’ in the role play will receive should reflect that initial representation of the character. It is important to read the case and the roles through carefully a few times and ideally to have someone else read them through for consistency as well.”

Making the case come alive

She concluded: “Having enough conflict, dilemmas and challenges - some of which enter the story through the ‘breaking news’ interruptions - is key to ensuring the case comes alive in the classroom, because it best reflects the sometimes chaotic and unpredictable nature of the startup phase of a business.

“The ethical, logistical, operational and emotional challenges in this case are all part of the beginning phase of developing a real-life business as are the messy, ongoing negotiations around roles, responsibilities, precise duties, reporting relationships and external communications.”

As well as being a traditional case, the series is also an experiential exercise and designed to build students’ negotiation skills.

THE CASE 

The case

Who – the protagonist

Sam McDowell, a renowned oncologist, who specialises in the treatment of aggressive breast cancer cases.

What?

Sam, her son Pat (a marketing specialist in the health insurance industry) and his friend Alex Crowley (a medical school classmate), created ChekAbuse to market Paradone, a revolutionary drug that Alex developed to counteract the insidious scourge of opioid addiction.

Sam was the driving force behind ChekAbuse, as she was determined to redeem her reputation after a devastating scandal in which she failed to report the illegal activities of her colleagues in their medical practices. The doctors in question took bribes to unnecessarily prescribe the opioid fentanyl (which is 50 times stronger than heroin).

Pipette dropping liquid in to test tubes

Why?

A number of issues cropped up to threaten the future of ChekAbuse. 

A not-so-successful second round of trials on Paradone meant the product was in question and the story could be reported by the media imminently. Jordan Stanich, an informal advisor to ChekAbuse, desired a greater equity in the company, with Sam and Pat in disagreement. Most importantly, money was rapidly running out and an unsuccessful third round of Paradone trials would likely amount to ChekAbuse’s death knell.

When?

It was October 2018 when Sam requested a meeting with Pat and Alex to discuss the best way forward for ChekAbuse.

Where?

Sam and Pat were based in Wilmington, Delaware, while Alex lived in nearby Baltimore, Maryland.

In 2018, the opioid epidemic was a national crisis in the US with 115 overdose deaths every day.

Key quote

“For so long, so many people have been suffering from the scourge of addiction. I have seen it first-hand in my home town of Baltimore where there has always been a problem in the inner city. Now, this terrible epidemic has spread to pretty much every corner of the country. It hits rich and poor, black and white, young and old.”
Alex Crowley.

What next?

Sam was ready to meet with Pat and Alex, followed by Jordan and Taylor Reyes (a new part-time hire).

How would the equity be split? Would the third trial be successful? What are the financing options? A lot needed to be discussed.

AUTHOR PERSPECTIVE 

Author perspective

The case for generalised experience

Susan said: “This case was developed from real-life experiences combined with actual events from the news (these events were taken from public sources, specifically on the ethics scandals at Insys and Theranos). 

“I was able to document actual events that I witnessed myself over the course of my teaching and consulting career such as unethical and dishonest discussions and negotiations over equity split for the founders and their initial team, the misrepresentation of events during the start-up phase of the business to investors and the media, and other anecdotes collected through the years. 

“Conducting field research is more time-consuming than drawing from real-life events and then developing a ‘composite’ case based on those events. Data and content from published sources can help fill out the stories to give them additional detail and colour.”

 

Combining field research and published sources

Susan commented: “The ChekAbuse case has two parts so students can get a sense of the constantly developing series of events that take place during the startup phase of a business. 

Line drawn between A and B points

“The case also includes multiple instances of ‘breaking news’ that participants must react to in real time. This makes the case and the discussion more realistic and the longitudinal time element makes the role play more memorable as it best mimics the actual experience of participating in the start-up phase of a business. 

“The ongoing, dynamic nature of the narrative that plays out over multiple cases and the interruptions/surprises inserted into the middle of the role plays makes for a more entertaining, memorable and realistic exercise.”

Family dynamics

She added: “The family business aspect of the case is based on a real-life family business I encountered during the course of teaching entrepreneurship.

“A student of mine was involved in a business with her family and she and the rest of her family described the all-encompassing nature of the business and the effect it has on family dynamics, which is reflected in the case. Younger siblings and others in the family who are not involved in the business feel left out and negotiations with ‘outsiders’ to the family are affected by the emotional nature of the relationships between family members who are involved. 

“In addition, honest discussions around the roles, rewards and responsibilities of the founding team can be adversely affected as family members are often loathe to offend those with whom they have such a close relationship.

“This is also true of close friendships like the one that we see between the two main protagonists in the case, Alex, the scientist who developed Paradone, the addiction treatment drug that is the company’s main product, and Sam McDowell, the physician whose earlier experiences turning a blind eye to colleagues’ corruption around the sale of a highly addictive drug called Languis have propelled her to want to start this company in part to clear her name. When Alex hides a less-than-successful initial trial phase from the rest of the team, or when Sam overestimates her child’s value to the company, the complications of doing business with close friends and family come to the surface in an unforgettable way.”

Consistency across the case

Susan explained: “The main challenge in writing this case and the role descriptions was to achieve consistency across the whole story. The roles and their accompanying emotions, activities and relationships needed to be covered in sufficient detail, as well as cross checking the relationship to ensure accuracy and consistency. For example, if a character is described one way in the case, their personality profile, feelings and thoughts in the role descriptions that each ‘actor’ in the role play will receive should reflect that initial representation of the character. It is important to read the case and the roles through carefully a few times and ideally to have someone else read them through for consistency as well.”

Making the case come alive

She concluded: “Having enough conflict, dilemmas and challenges - some of which enter the story through the ‘breaking news’ interruptions - is key to ensuring the case comes alive in the classroom, because it best reflects the sometimes chaotic and unpredictable nature of the startup phase of a business.

“The ethical, logistical, operational and emotional challenges in this case are all part of the beginning phase of developing a real-life business as are the messy, ongoing negotiations around roles, responsibilities, precise duties, reporting relationships and external communications.”

As well as being a traditional case, the series is also an experiential exercise and designed to build students’ negotiation skills.

THE CASE 

The author

Susan Harmeling
Associate Professor of Clinical Entrepreneurship

The protagonist

Sam McDowell
Founder
ChekAbuse
Read the case

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INSTRUCTOR PRESENTATION MATERIAL - Reference no. SCG-862
INSTRUCTOR PRESENTATION MATERIAL - Reference no. SCG-863
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