PharmaCARE is a successful pharmaceutical firm and it runs several subsidiaries across the world. Recently, the company has been involved in unethical conduct. The company’s workforce in Colberia is largely comprised of the natives who work for as low as $1 per day. Besides, the company has allegedly caused harm on the environment owing to its activities. The company is said to offer subsidized drugs to the poor in the society.
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However, the drugs are said to have side effects on the human health. This paper analyzes the ethical issues surrounding the company and compares this case with Johnson & Johnson Company, which had similar issues. The paper also gives recommendations on what can be done to contain the situation.
The key characteristics of a stakeholder within the PharmaCARE scenario
Stakeholders are people or entities affected directly or indirectly by a decision made by the management of a company. The best way to characterize stakeholders is by identifying the effect caused by the decision in question. In this regard, stakeholders are grouped into two major categories, viz. primary stakeholders and secondary stakeholders. Primary stakeholders stand to gain or lose directly due to the decision made by the firm while secondary stakeholders are affected indirectly.
In this context, PharmaCARE, CompCARE, Wellco, the employees, the 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, CompCare, stand to gain revenue if customers are satisfied with its products. 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 they will be directly affected by a decision by the company to quit production or improve the quality of the products. Investors are the owners of the company, and they are directly affected by any decision by the management.
The human rights issues presented by PharmaCARE’s treatment of the Colberia’s indigenous population versus that of its executives
It is evident that the company has little or no respect for the native workers in Colberia. The company exploits the poor Colberians by using them as objects for making huge profits. The company’s executives live in decent houses, drive luxurious vehicles, and receive big salaries. Those employed by the company are subjected to hard tasks only to receive $1 per day. Native employees of the company live in abject poverty, and most of them reside in slums where they cannot access clean water and electricity. Additionally, the natives work in a highly hazardous environment.
The ethicality of PharmaCARE’s actions with respect to the indigenous people of Colberia
PharmaCARE exploits the Colberian resources without the consent of the authorities. This aspect amounts to the violation of the intellectual property law and it is unethical (Shalden, Guennif, Guzmin, & Lalitha, 2013). The company is surrounded with malpractices and probably the provision of job opportunities to the natives is the only positive aspect for PharmaCARE. However, even as the company creates job opportunities for the natives, the employees are exploited and their rights as employees are not respected.
Additionally, the company manufactures and sells drugs that are harmful to the consumers with deaths reported in some cases. Therefore, the company promotes unethical practices, 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 and consumption of its products. Under the utilitarianism theory, the company is unethical since it produces drugs that cause more harm than good to the Colberians.
The deontological theory requires that the management a company exercise honesty in their capacity as managers (Halbert & Ingulli, 2014). The company is dishonest to the public, as it does not disclose the negative side effects of the drug on the human health. Cardiac deaths resulting from the use of the drug have been reported, but the company denies having contributed to the loss of lives. The company is driven by greed, and it ends up deceiving the public about the effectiveness of the drug without disclosing the negative sides. This aspect demonstrates the company’s level of dishonesty; hence, it does not follow the deontological approach.
Ethics of care
PharmaCare lacks the ethics of care since it disregards the interest of the stakeholders in the decision-making process. If the company cared about the stakeholders’ interest, it would not have manufactured and sold the drug to the public since this decision affected the stakeholders negatively. Customers were directly affected by the decision since the drug caused health complications and even deaths. The company and its subsidiary were equally affected as they lost revenue due to the public’s misconception about the drug.
The loss of revenue meant that the company had to lay off some of its workers to cut down the operational costs, thus affecting employees as well. On the other hand, investors may 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 and destroys the environment without considering the effects that such action would have in the long-term.
Virtue ethics is linked to the individual characters and behaviors (Dukes & Graham, 2005). Each employee in a company is expected to conduct him/herself in the right manner. The situation in PharmaCARE demonstrates a violation of virtue ethics. The management 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 drug. The management was not willing to take responsibility for the damage caused by the drug. On the contrary, it dismissed the allegations as rumors meant to destroy the company’s reputation.
My moral/ethical compass
According to my moral compass, one is supposed to treat others as s/he expects others to treat him/her. The company’s executives live luxuriously and enjoy employment benefits while the natives live in abject poverty. I opine that all employees in the company ought to be treated fairly. I also feel that the management should have acted with honesty regarding the disclosure of material facts about the drugs manufactured by the company. The decision to distribute the drug without testing it posed a threat to the safety of the consumers and it amounted to unethical practices. In light of this, I conclude that the company falls short of my moral compass.
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 posed a threat to the indigenous species. In this regard, the company ought to work with the natives to conserve the environment. PharmaCARE should apply the concepts of corporate social responsibility (CSR) and dedicate some funds towards supporting certain initiatives meant to conserve the environment. PharmaCARE is yet to adhere to the provisions of environmental laws in its operations.
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The company has not put in place sufficient measures to conserve the environment. Nevertheless, critics may argue that the natives also contribute to environmental destruction since they are directly involved in the crop harvest. PharmaCARE has an initiative known as, “We CARE about YOUR world”, indicating its dedication to environmental conservation via recycling and waste clean up notwithstanding that the firm’s lobbying efforts have defied rules and guidelines, as well as the additional Superfund tax imposed by CERCLA. Therefore, PharmaCARE’s environmental initiative is ineffective, as it does not conserve the environment as expected.
Comparison of PharmaCARE’s actions with those Johnson & Johnson
Just like PharmaCare, Johnson & Johnson Company was surrounded by similar issues. The company produces a drug called Risperdal, which is approved by the FDA. Even though the FDA approved the drug as a cure for schizophrenia, the company misled the public that the drug would equally heal other ailments such as autism, anxiety, and anger problems among others (Stewart & Paine, 2011).
By lying to the public about the curative powers of the drug, the company ignored ethics of care, deontology ethics, and virtue ethics just like PharmaCARE. The company lost about 2 billion dollars in the form of fines in both civil and criminal cases brought against the company. The effect of the loss was two-fold. On the side of the company, it affected profits thus reducing dividends paid to shareholders. However, the winners of civil cases benefited through compensations.
The company manufactured the drug and advertised the positives, but remained silent on the negatives. Just like PharmaCARE, the company’s management was aware of the view that the drug would affect negatively certain groups of people such as the aged and minors, but it failed to disclose such facts. Being in the pharmaceutical industry, the company 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.
Changes that PharmaCARE can make to be more ethical going forward
The company should adopt the following strategies going forward. Firstly, it should establish an internal department to test its products before releasing them to the consumers. This move will avert cases of deaths or illnesses resulting from the use of its products. Pre-testing of drugs will improve the company’s image and increase sales and revenue. Secondly, the company should embrace the concept of corporate social responsibility.
The CSR concept requires companies to ensure the safety of the environment of doing business (Lee & Kohler, 2010). The company should adopt strategies aimed at conserving the environment and supporting the local communities as part of the CSR initiative (Nussbaum, 2009).
Such strategies would include planting more trees to replace the ones used in the production of their drugs. Finally, the company should respect the rights of its employees. Matching the employees’ salary with their efforts would empower them and increase productivity. Having realized the health hazards associated with the job environment, the company should initiate a medical cover for all its workers. Additionally, the company should consider making changes to the management or replace the current one to redeem its image.
PharmaCARE is one of the leading companies in the pharmaceutical industry. The company has been accused of manufacturing drugs that are unfit for human consumption. Besides, PharmaCARE conducts its business unethically coupled with ignoring the CSR provisions. The company should adopt CSR and uphold the employees’ rights by observing fairness in remuneration and workplace safety.
Dukes, M., & Graham, N. (2005). The law and ethics of the pharmaceutical industry. Philadelphia, PA: Elsevier.
Halbert, T., & Ingulli, E. (2014). Law and ethics in the business environment (8th ed.). Cincinnati, OH: South-Western College Pub.
Lee, M., & Kohler, J. (2010). Benchmarking and transparency: incentives for the pharmaceutical industry’s corporate social responsibility. Journal of Business Ethics, 95(4), 641-658.
Nussbaum, A. (2009). Ethical corporate social responsibility (CSR) and the pharmaceutical industry: A happy couple? Journal of Medical Marketing, 9(1), 67-76.
Shalden, K., Guennif, S., Guzmin, A., & Lalitha, N. (2013). Intellectual property, pharmaceuticals and public health: access to drugs in developing countries. Northampton, MA: Edward Elgar.
Stewart, K., & Paine, W. (2011). Johnson & Johnson: An ethical analysis of broken trust. Journal of Academic & Business Ethics, 5, 1-11.