Application of Ethical Theory to a Case Study Vignette - Coursework Example

Application of ethical theory to a case study vignette Business and Society Submitted by _______________________ Submitted to _______________________ Date University Name What are the ethical issues? In the given case, Dr. Patel, who is an independent board director and Chair of the CSR board committee of a multinational pharmaceutical company namely, StarAlphaMedicines, has to decide whether to withdrew an easy-to-use insulin pen injection product from country X or not. The reason is that Country X has announced a 25% price cut for medicine products in order to reduce country’s crippling debt. This price cut would force the company to sell the medicine at a loss, causing financial burden. On the other side, the company is also concerned that this reduction would have a knock-on-effect as other countries use country X as a key reference point for setting their drug prices. Dr. Patel also knows that about 50,000 people in country X are dependent on this product, withdrawal of which may cause death of some people. On the other side, if the company does not withdraw the drug, it will be selling its product on loss and bearing financial losses. Mr. Patel is facing an ethical dilemma to choose a decision. Who are the primary stakeholders? The stakeholders include Dr Elizabeth Patel, who is the decision maker for this particular situation; all those 50,000 people of country X, who rely on this insulin drug the stoppage of which may cause death among them; the directors, stakeholders and employees of the StarAlphaMedicines, which are directly influenced by the nature of this particular decision; and country X can also be included as an indirect stakeholders which will be affected with the decision of the company – in case the company withdraw its medicinal products, the life expectancy rate of the country may decrease etc. What are the possible alternatives? 1. Dr. Patel withdraws the product from country X 2. Dr. Patel does not withdraw the product from country X 3. Dr. Patel continues to sell the product for sometime while at the same time, convince the government to let sell its product at a reasonable price by telling them about the loss caused by the company and the possible consequences that might be faced if the product is withdrawn. Evaluation of the case using ethical theories In view of ethical theories, which are constituted by moral philosophers by determining various ethical standards, we can judge any ethical dilemma. The case is thoroughly analyzed below with the help of two ethical theories. 1. Utilitarianism: According to Manuel G. Vleausquez, Utilitarianism is a term which suggests that actions and policies should be evaluated on the basis of the benefits and costs they will impose to the society (VELASQUEZ, Manuel G, 2007). It means that an action is right if the sum of total utilities produced by the action is greater than the sum of total utilities produced by another act. This approach suggests selecting those actions that have the maximum benefit for the maximum number of people. However, it does not mean that the utility should be maximized for the person performing the act; rather it talks about utility for all the persons affected by the action (VELASQUEZ, Manuel G, 2007). On the other side, there is a common misconception that an action is right as long as its utilities outweigh its cost. However, this theory states that an action is right in the final analysis which has the greatest utility or benefit for the greatest number of people. Another misconception is that it is commonly believed that this approach requires considering only short term or immediate consequences of the action. However, considering both immediate and long term consequences are required and even those significant indirect effects (MILL, John Stuart, 1863). Evaluating the given case with this approach suggests that Dr Elizabeth Patel should not withdraw the product from country X. The decision will result in the maximum utility for the maximum number of people. The most benefited would be the people of the country X, which are using this drug and saving their life. The country is also being benefited with this decision because its people are still using the drug, thus the forecasted deaths will not occur that may have otherwise occurred and on the other side. Though, Dr Patel and his company, StarAlphaMedicines, may not gain immediate utility through this action, however, there is a great potential of benefits in the long-term, in the same way that Merk and Company gained by donating a drug to treat millions suffering from the river blindness (DRISDELLE, Rosemary, 2007). The theory of utilitarianism also considers morality while taking an action. Therefore, it considers the benefits or harms of the action that will be imposed on human beings. In this case, the discontinuity of the medicine may produce as severe result as death of people. There was no treatment of River blindness, a parasitic disease, until late 1980s. Millions of people were affected with this disease, mostly in Africa and third world countries. The drugs that were available at that time had serious side effects and these were very expensive. At that time, Merk discovered that Mectizan, a human formulation of Ivermectin. No was ready to develop this drug because the users of these drugs were poor and they could not afford it. Thus, there was no incentive for companies to invest. However, Merk spent millions of dollar in research work and in the formulation of the drug. After it formulated the drug, there was no one to buy it. So the company decided to distribute it to the affected people free of cost. With the help of international organizations, the company distributed the drug in affected regions of the world. By 2001, onchocerciasis and its risk were alleviated in over 200 million people through drug treatment with insect control. According to an estimate, about 600 thousand cases of blindness have been prevented and 16 million children have been spared infection whereas 25 million hectares of land which were previously polluted with blackfiles, a fly that transmit onchocerciasis, are now made habitable by humans (DRISDELLE, Rosemary, 2007). This huge financial risk taken by Merk and Co. paid off for the company in the long-run. Today, Merk and Co. is considered to be an ethical company, enjoying huge positive public image. People prefer Merk’s product as compared to other. The company also helped Japan to solve tuberculosis after WW2. Today Merck is the largest American Pharma company in Japan. Similarly, StarAlphaMedicines, by bearing this financial loss, may get long-term public favor by not discontinuing this drug. However, if the financial losses are not bearable by the company and if there are chances that the company will be collapsed because of not withdrawing the medicine, then it is better to withdraw the medicine from country X, because then there will be more damage, because if the company won’t operate, then countries other than country x would also not get the easy to use insulin and other medicinal product of the StarAlphaMedicines, thus causing damages to greater amount of people in greater number of countries. 2. Kantian: The theory was developed by Immanuel Kant which states that there are certain moral rights and duties that all human beings possess regardless of any utilitarian benefits (Philosophy Lender, 2009). His theory is based on categorical imperative which is based on two formulations. The first formulation requires considering two criteria which are universaliability and reversibility (LINDEN, Harry Van Der, 1988) (VELASQUEZ, Manuel G, 2007). The universaliability focuses on the fact that an action is right morally if the reason for doing this act is a reason that the person would be willing to have every person act on. It means that the inner motivation of doing something is mainly considered rather than the consequences of the action. The reversibility concept says that you should consider yourself to be the subject to that given action on a given situation (VELASQUEZ, Manuel G, 2007). According to the second formulation, “Never use people merely as means, but always respect and develop their ability to choose for themselves” (VELASQUEZ, Manuel G, 2007) The Kantian theory has been criticized heavily as being vague. It has been criticized of unclear categorical imperatives, conflict of rights and for some mistaken moral conclusions (A Critique of the Kantian Ethics, 2005) Considering Kantian theory, Dr. Patel may withdraw the product from country X considering the closure of company as a big loss not to company itself, but to other countries which are currently using the products of StarAlphaMedicines. If the company does not withdraw the product, it will suffer losses not only from country X, but from other countries as other countries use country X as a key reference point for setting their drug prices. Thus, the intention of Dr Patel is fair keeping in view this theory, which greatly focuses on the intention instead of any other thing. Dr Patel is considering the well being of the company as well as the well being of the countries that may be otherwise affected by not withdrawing the product and thus closure of the company. What action should be taken? If Dr. Patel does not discontinue the product, it will create huge and unbearable financial loss. The losses will not be from one country i.e. the country x, but the 25% reduction in the price would have a knock-on-effect as other countries use country X as a key reference point for setting their drug prices. Thus, StarAlphaMedicines will be facing losses from all the countries where it sells its medicine. In this way, the company will not be able to continue its operation which will eventually lead to the bankruptcy of StarAlphaMedicines. In long-term, it means that no more easy to use insulin and other medicine for any country. Thus, the damages are not confined to the company itself but the whole lot of countries. On the other side, discontinuing the product means only one country is affected but other countries can still have the medicine and the company can still survive. Should the situation let StarAlphaMedicines have survived or made the company bear the loss for a particular not-so-long period of time, it would have been better for the company as well as for everyone, not to withdraw the product. But as per the given case, it seems that the company will not survive bearing losses from all the countries. Inability to perform something eliminates moral responsibilities. In the given case, the company cannot survive without withdrawing the product. Not only will it harm the country, but the other countries because when the company will be closed, its medicinal products are also discontinued. Thus, the Government intervention of country x to make favorable condition for the company is extremely required to solve this situation in the most favorable condition. Bibliography A Critique of the Kantian Ethics. 2005. [online]. [Accessed 12 Dec 2010]. Available from World Wide Web: < HYPERLINK "http://home.sprynet.com/~owl1/kant1.htm" http://home.sprynet.com/~owl1/kant1.htm > DRISDELLE, Rosemary. 2007. Eliminating River Blindness. [online]. [Accessed 11 Dec 2010]. Available from World Wide Web: < HYPERLINK "http://www.suite101.com/content/eliminating-river-blindness-a25397" http://www.suite101.com/content/eliminating-river-blindness-a25397 > Kantian Ethics. 2009. [online]. [Accessed 11 December 2010]. Available from World Wide Web: < HYPERLINK "http://philosophy.lander.edu/ethics/kant.html" http://philosophy.lander.edu/ethics/kant.html > LINDEN, Harry Van Der. 1988. Kantian Ethics and Socialism. USA: Hacket Publishing Company. MILL, John Stuart. 1863. Utilitarianism. London: Savill And Edwards. VELASQUEZ, Manuel G. 2007. Business Ethics. New Dehli: Pearson Education. Read More