This paper will entail an analysis of the case that focuses on political and legal systems in national environments. As stated in the case, ethical behavior can be regarded as a crucial aspect while conducting business. It ensures that there is a reduction of country risk. Governments put sanctions on organizations that engage in practices that are questionable and outside the law.
Forming alliances with local partners can also be crucial in reducing country risks. This is because local partners tend to be knowledgeable about local issues. Another strategy that can reduce country risks includes protection through legal contracts. Legal contracts are essential since they ensure that each of the parties follow the laid down agreement.
Disputes in a contract may emanate at the international level, and they can be solved through a number of approaches. Some of the strategies that can help to solve such conflicts include litigation, arbitration and conciliation. There are various legal, political, as well as ethical dilemmas in the global pharmaceutical industry.
One of the issues includes high cost, which the industry incurs in research and development. This emanates from the fact that firms in the pharmaceutical industry have to carry out intensive activities in the manufacture, as well as marketing of drugs. The research and development activities carried out by pharmaceutical firms have played a crucial role, as it allows people to live longer and stay healthy.
The other issues affecting pharmaceutical firms include lack of protection of their intellectual property rights and the presence of generic brands in the market. The protection of intellectual property in some countries tends to be inadequate and unreliable. For instance, there are weak laws for the protection of intellectual property in India.
Inadequate protection of intellectual property has been a hindrance to research and development as well as innovation. Generic brands pose a significant challenge to drug manufacturers since they are sold at a low price. As a result, people opt to go for generic brands, which are more affordable.
The circulation of counterfeit drugs in the market is also a challenge to drug manufacturers. This emanates from the failure of the government to control the quality of drugs imported in a country. For instance, in 2007, one million ‘One Touch Test Strips’ that were fake were supplied from China to India, Canada, and the United States. According to estimates by the United Nations, the world witnesses an annual sale of over $500 billion counterfeit drugs.
The main stakeholders in the legal and political system include governments as well as international agencies like the United Nations and the World Trade Organization. The public also plays an essential role in scrutinizing the activities of the pharmaceutical industry. Other stakeholders may include interest groups such as organizations dealing with environmental issues.
Adequate protection of intellectual property will ensure that pharmaceutical firms invent new drugs. In addition, adequate laws should be instituted to limit the circulation of fake drugs in the market. This way, there will be easy control of the spread of substandard drugs, which may have side effects on the users.
The legal systems in a country have a role to play in reducing country risk. Governments should institute laws that protect the consumers as well as manufacturers. Existent laws should prevent the sale of low quality products such as drugs.