PharmaCARE is a drug manufacturing company situated in New Jersey, but it has a production plant in Colberia. The company is surrounded by numerous ethical issues. In Colberia, the company has employed natives who work for as low as $1 per day. Critics allege that the company has caused great harm to the environment owing to its activities. The company is said to offer subsidized drugs to the poor individuals in society, but the drugs allegedly have side effects on the human’s health, as they are attributed to cardiac related deaths, which have occurred in Colberia. This paper analyzes the ethical issues surrounding the company and compares it with Johnson & Johnson Company, which had similar issues. The paper will give recommendations on what can be done to contain the situation.
Describe the key characteristics of a stakeholder and determine all the stakeholders within the PharmaCARE scenario.
The term ‘stakeholders’ defines people or entities that are affected by a decision made by the management of a company directly or indirectly (Freeman & Moutchnik, 2013). Stakeholders are grouped into two major categories, viz. primary stakeholders and secondary stakeholders (Smith, 2008). Primary stakeholders are those individuals or groups that stand to gain or lose directly due to the decision made in a company. On the other hand, secondary stakeholders are individuals or entities that are affected indirectly by a decision made in a firm.
In this context, PharmaCARE, CompCARE, Wellco, employees, Colberians, and the investors of the company are the stakeholders. All the aforementioned groups may be affected directly or indirectly by the firm’s decisions. The company and its subsidiary, viz. CompCare, stand to gain in terms of revenue if customers are satisfied with its products. On the other hand, employees work industriously for the success of the business in return for salaries and other benefits. The Colberians are the potential customers of the business and it will only flourish if they are satisfied with the company’s products. They will be affected directly by any decision by the company to quit production or improve the quality of the products. Investors are the people or groups that put their funds in the company in return for dividends. They are the owners of the company, and thus they are affected directly by decisions made by the company managers on their behalf.
Analyze the human rights issues presented by PharmaCARE’s treatment of the Colberia’s indigenous population versus that of its executives.
Given the human rights issues surrounding PharmaCARE, it is evident that the company has little or no respect for humans. The company’s aim is to exploit the poor people in society and use them as objects for making profits. The company’s executives live in decent houses, drive luxurious vehicles, and receive big salaries. Ironically, the natives live in squalid conditions in their own country. Those employed by the company are subjected to hard tasks only to receive $1 per day. Native employees of the company live in absolute poverty and they cannot afford to live in decent houses, as the majority of them reside in slums without access to water and electricity. Additionally, the natives work in a very hazardous environment, which is a clear indicator that the company does not have respect for human rights and its objective is only to exploit the poor and the less fortunate in society.
Decide whether PharmaCARE’s actions with respect to the indigenous people of Colberia would be ethical in accordance with each of the following ethical theories:
PharmaCARE exploits the Colberian resources without the natives’ consent. This aspect amounts to violation of the intellectual property law and it is unethical (Al-Sukhni & Ballantyne, 2007). The majority of the company’s operations are negative and probably the provision of job opportunities to the natives is the only positive thing happening to the nation. However, even as the company creates job opportunities for the natives, they are exploited and their rights as employees are not respected. Additionally, the company manufactures and sells drugs that are harmful to consumers. The company denies allegations over the harm caused by its drugs even with the evidence of deaths amongst the consumers. The company is thus irresponsible and it does not respect the Colberians. The company makes huge profits at the expense of the natives who are directly involved in the company’s operations. Under the utilitarianism theory, the company is thus unethical since it produces drugs that cause more harm than good to the consumers.
The company does not follow the deontological approach in its operations. Deontological theory requires the management a company to exercise honesty in their capacity as managers (Waller, 2005). The company is dishonest to the public, as it does not disclose the negative side effects of its drugs on human health. Cardiac deaths from the use of the drugs have been reported and the company denies having contributed to the deaths. The company is driven by greed and thus it ends up deceiving the public about the effectiveness of the drugs without disclosing the side effects. This observation demonstrates the company’s level of dishonesty, and thus it can be concluded that the company does not follow the deontological approach.
Ethics of care
PharmaCARE lacks ethics of care since it disregards the interest of the stakeholders in the decision-making process. If the company cared about the stakeholders’ interests, it could not have manufactured and sold the said drugs to the public since it knew the decision would affect the stakeholders negatively. Customers were directly affected by the decision since the drugs caused complications and even deaths. The company and its subsidiary were equally affected as they lost revenue due to the misconception by the public about the drugs. Loss of revenue meant that the company had to lay off some of its workers to reduce operational costs, thus affecting the employees’ wellbeing. On the other hand, investors stand a chance to lose their money in case the company is forced into liquidation. The company also lacks ethics of care since it exploits the nation’s intellectual properties coupled with destroying the environment without considering the effects that their actions would have on the nation.
Virtue ethics is linked to the individual characters and behaviors. Each employee in a company is expected to conduct him/herself in the right manner. The situation in PharmaCARE demonstrates a deviation from virtue ethics. The management of the company threatened to fire employees who complained about the hazardous working conditions in their workstations. Making such threats to employees instead of addressing the issue is an indicator of lack of virtue ethics. Failure to observe virtue ethics is also seen in the management’s reaction to rumors about the side effects of the said drugs. The management is not willing to take responsibility for the damage caused by the drug and instead it dismisses the allegations as rumors meant to destroy the company’s reputation.
Personal moral / ethical compass
In my opinion, people are supposed to treat others as they expect others to treat them. The company’s executives live luxuriously coupled with enjoying employment benefits while the natives live in dire poverty. I am of the opinion that all employees in the company ought to be treated equally. I also feel that the management should have acted with honesty after the disclosure of material facts about the firm’s drugs. The decision to distribute the drugs without testing poses a threat to the safety of the consumers and it amounts to disregard of moral values. In light of this assertion, I would conclude that the company falls short of my own moral compass.
Assess PharmaCARE’s environmental initiative against the backdrop of its anti-environmental lobbying efforts and Colberian activities.
The company has caused notable destruction to the environment and it has posed a threat to the indigenous species. In this regard, the company ought to work with the natives in an attempt to conserve the environment. The company should apply the concepts of social responsibility and dedicate funds towards supporting certain initiatives meant to conserve the environment. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is the single law that regulates environmental conservation (Al-Sukhni & Ballantyne, 2007).
The law has undergone certain amendments since its enactment and in the recent years, a superfund program has been created. PharmaCARE is yet to adhere to the amendments and the provisions of environmental laws. The company has not put in place sufficient measures to conserve the environment. However, critics argue that the natives also contribute to environmental destruction since they are directly involved in the crop harvest. Nevertheless, PharmaCARE has an initiative known as, “We CARE about YOUR world”, which underscores its dedication to environmental conservation via recycling and waste cleanup notwithstanding the fact that the firm’s lobbying efforts have effectively defied rules and guidelines, as well as addition Superfund tax imposed by CERCLA.
Compare PharmaCARE’s actions with those of at least one (1) real-world company, whose corporate activities led to ethical, environmental, or workplace safety issues and financial loss.
Just like PharmaCare, Johnson & Johnson Company was surrounded by similar issues. The company produces a drug by the name Risperdal. Contrary to the PharmaCARE’s drug, Risperdal is approved by the FDA. Even though the FDA approved the drug as a cure for schizophrenia, the company went ahead to deceive the public that Risperdal would equally heal other ailments such as autism, anxiety, and anger problems among others. By lying to the public about the healing power of the drug, the company ignored ethics of care, deontology ethics, and virtue ethics just like PharmaCARE did in COlberia. The company lost about 2 billion dollars in form of fines in both civil and criminal cases brought against it.
The effects of the loss were twofold. On the side of the company, it reduced its profits thus cutting down dividends paid to shareholders. However, the winners of the civil cases benefited through damages paid to them as a way of compensation. The company manufactured the drug and advertised the positives, but it remained silent on the negatives. Just like PharmaCARE, the management of the company was aware of the fact that the drug affected certain groups of people such as the old and minors negatively, but it failed to disclose these facts. Given that the company is in the pharmaceutical industry, it had the responsibility of manufacturing high quality drugs that are safe for human consumption. The company ought to have set an internal board to test the drug before releasing it to the market.
Recommend at least three (3) changes PharmaCARE can make to be more ethical going forward.
The company has been accused of unethical behaviors in the course of conducting its business. The company should adopt the following strategies in order to correct the cited shortcomings. Firstly, the company should establish an internal department to test its products before releasing them to the public. This move will avert cases of death or illnesses from the use of the products. In addition, the move will also help in clearing the misconception about the company’s drugs, and thus lead to increased sales and revenue. Secondly, the company should embrace the concept of corporate social responsibility. Social responsibility concept requires a company to ensure the safety of the environment within which it operates (King, 2008).
The company should adopt strategies aimed at conserving the environment. Such strategies should include planting more plants to replace the ones used in the drugs’ production process. Finally, the company should respect the rights of its employees. The company should implement the minimum wage policy and provide its workers with habitable working conditions. After realizing the health hazards associated with the job, the company should initiate a medical cover for all its workers. Additionally, the company should make changes to the management or replace the current management, which exploits workers intentionally.
PharmaCARE is one of the leading companies in the supply of drugs. The company manufactures drugs from herbs. The company has been accused of manufacturing unsafe drugs for human consumption. The company conducts its business in unethical manner and it ignores the aspect of social responsibility. The unethical acts are evidenced via the way in which the firm handles its employees. Its main employees are the Colberians who live in absolute poverty and they work in hazardous environment. On the other hand, the company’s executives live luxuriously at the expense of the natives. The company should follow the given recommendations in a bid to change the situation and preserve its good reputation.
Al-Sukhni, M., & Ballantyne, P. (2007). Pharmaceutical-Related Strategies for Health Care Reform in Canada: Federal Party Principles, Priorities, and Actions 2004–2006. Canadian Pharmacists Journal, 140(1), 38-45.
Freeman, E., & Moutchnik, A. (2013). Stakeholder management and CSR: questions and answers. UWF, 21(2), 5-9.
King, I. (2008). How to make good decisions and be right all the time: solving the riddle of right and wrong. London, UK: Continuum International Publishing Group.
Smith, A. (2008). Corporate social responsibility practices in the pharmaceutical industry. Business Strategy Series, 9(6), 306 – 315.
Waller, N. (2005). Consider Ethics: Theory, Readings, and Contemporary Issues. New York, NY: Pearson Longman.