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Ethics in Business

Ethics in Business. Ethical Dilemmas Facing Drug Manufacturers Saving Lives, Making Money or Somewhere In Between. Zina Amari Rob Howe Louis Morris Andy Ratolojanahary Ilya Vasilenko MBA 674 17 April 2013. Purpose/Agenda.

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Ethics in Business

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  1. Ethics in Business Ethical Dilemmas Facing Drug Manufacturers Saving Lives, Making Money or Somewhere In Between ZinaAmari Rob Howe Louis Morris Andy Ratolojanahary IlyaVasilenko MBA 674 17 April 2013

  2. Purpose/Agenda Purpose: To evaluate ethical considerations regarding the actions of drug manufacturers Agenda: • Issue • Facts and Background • Company • Facts and Background • Ethical Question • Wall Street Journal Analysis • Friedman • Freeman • Questions

  3. Issue • Facts • Methotrexate-acute lymphoblastic leukemia in young children. • Roughly 3,500 American children and teens diagnosed with this cancer each year. • Of which, 90% is said to be curable with drug. • In 2011, 267 new drug shortages reported. • Up from 54 in 2010. • Background • Government's tight price controls for generic drugs. • Many pharmaceutical manufacturers have failed to invest in the technology and quality-control improvements that would reduce the risks of partial or complete facility shutdowns • As the video states, companies are failing to report shortages.

  4. Company • Facts • Established in 1938, Ben Venue Laboratories is the manufacturing arm of Bedford Laboratories. • Ben Venue Laboratories Inc., the leading distributor, closed after federal inspectors found it had not been properly maintaining equipment or promptly addressing defective product batches and sterility problems. • Four other companies reported production problems as well. • Background • In Feb, 2011, Department of Health and Human Services wrote a letter to BVL for it’s violations. • In Dec, 2011, BVL is rumored to have had an unknown substance in their 38 stainless steel mixing vessels. • In Jan 2013, FDA injunction for failing to comply with current good manufacturing practice requirement.

  5. Ethical Question Do Drug Companies have an Ethical Obligation to Produce Unprofitable Lifesaving Cancer Drugs?

  6. WSJ Model • Am I in compliance with the law? • What contribution does this choice of action make to the company, the shareholders, the community, and others. • What are the short- and long-term consequences of this decision

  7. Theorists Friedman: Social Responsibility of a Business it to Increase its Profits • Produce the medication based to protect the long term interests of shareholders Freeman: Shareholders, Employees, Customers and Community have stakes in a business and each groups’ interest is equally important • Producing the medication would contribute to a balanced benefit for the stakeholders as a whole, and will serve a humanitarian goal of saving lives

  8. Friedman Contributions: • Company (Managers and Employees) • Profit the Company in the Long Term • Employee Fulfillment • Shareholders • Maximize Shareholder Profit • Ensure Long Term Value • Community • Residual benefit to community via benefit to shareholders

  9. Friedman Short Term Consequences: • Company • Profit loss • Lower Wages and Compensation • Employee Motivation • Positive Public Image • Shareholders • Decreased Value • Community • Prevents Death • Provides peace of mind

  10. Friedman Long Term Consequences: • Company • Continued existence • Maintain Positive Public Image • Brand Enhancement • Attract More Investment • Shareholders • Added Long Term Value • Community • Increased Costs of other Drugs • Trickle down wealth from shareholders • Long Term Benefit from Cancer Drug availability

  11. Freeman Contributions: • Company (Managers and Employees) • Reduces Risk of Litigation and Overreaching Regulation • Meaningful work (saving lives) • Shareholders • Ensures Steady Earnings and Long Term Value • Customers • Get treatment • Community • Jobs are not lost, tax base • Proud employees create a healthy environment in the locale

  12. Freeman Short and Long Term Consequences: • Company • Emotionally Healthy and Productive Employees • Satisfied Customers • Positive Community Image • Shareholders • Short term - Missed Profits • Long term – Added Value and continuity of business • Customers • Lead normal lives and become productive citizens • Community • Promotion of ethical behavior • Saved lives • Economic dynamism and growth

  13. Freeman • Balancing Stakeholders Interests: • Vulnerability and dangers of Entitlement Society • Utilitarian Theory or “the greatest happiness principle” • Simple tests for resolving ethical issues • The Jennings National Enquirer Test • Dr. Peter Drucker’s maxim

  14. Examples • King Hussein cancer center (Friedman) • Ford Motor Company (Freeman) 

  15. Conclusion • Yes, we believe that drug manufacturers have a moral obligation to produce unprofitable drugs • Differ in the Reasons Why

  16. Questions

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