Rosendahls Dilemma 3 - Essay Example

The outbreak, Rosandahl’s Dilemma The high cost of essential medicines has decreased its access by poor people or underdeveloped countries. There has been a constant barrier to the needed treatment if an epidemic breaks out in a particular country. For example, in the early 90s, African countries were facing an HIV/AIDS epidemic with massive deaths of its citizens. These countries lacked proper medical facilities and supplies to fight such a disease, the medicines were also very expensive and importation was difficult. In 2003, the US and WTO allowed for the production of a class of medicinal drugs with no brand name. These drugs were a replica of the HIV drugs and would be produced in other countries. This move was as a result of pressure exerted upon the two by African countries and human rights activities. The provision did not allow the generic manufacturer to sell or export the drugs to other countries except to the specified ones. Many countries have faced constant lack of medicines when there is an outbreak of other diseases such as Ebola, SARS and even swine flu. Just at the end of the 20th century most drug producing companies were forced into mergers in order to help cope with the rising demand for health care. Amongst the reasons for these mergers were the rampant cases of pandemic diseases like AIDS that required drug producing firms to be well equipped in terms of research and development, training and developing of new strains of drugs to cope with the health challenges. The rising technology and the resistivity to drugs by most pests and diseases also led to these mergers. Moreover, most governments were pushing drug companies into developing drugs that were cheaper in order to combat most pandemics like AIDS. For this reason, most companies entered into merger in order to reduce costs of production and meet their customers’ needs at the lowest cost possible. This also made the drug regulating bodies to slacken their rules allowing most countries like India to produce their own drugs at the least cost. This led to production of very low quality drugs. The World Trade Organization is obligated to give patent protection to any new invention as stated under article 27 of the TRIPS agreement. This article states that, “Patents should be availed for any product, service or system invented in all areas of technology, as long as they have not been presented before. Patents rights should be given without any unjust distinction between inventors, area of technology or country of origin”. An inclusion is made in article 30 where the opposite can occur. The article allows members of the organization to give an exception to patent right protection as long as the exceptions do not collide with the interests of the patent owner (World Health Organization). Mubanda was facing an epidemic, the SALS was causing death of people in different areas of the country. Being a poor country, the government could not afford to supply the required medication to the large number of people suffering from the disease and those who were susceptible to it. This epidemic was termed as a crisis since it was spreading very fast from one region to the next. The country was in need of a quick solution that would see the epidemic controlled to a minimum. The lack of enough resources to fight the disease caused a major hindrance to the government and the health sector at large. Other countries feared the spread of the disease to their citizens and in turn sufferer its devastating effects, so they closed all their routes bordering Mubanda. The closure meant that there could be no trade between Mubanda and its neighbors, thus social amenities such as food, water and even petrol would become scarce. This situation would throw the country into further jeopardy such as famine and countless deaths. The health minister needed to act fast to save the country and its citizens. There were a number of options available to her and the only best option was to arrange for development of Holizan by a separate company. Holizan was Rosendahl’s best performing product in the market. Being costly, the country could not afford to buy the drug in bulk and give to its people. Rosendahl on the other hand was looking forward to increasing its profits since it had been in the country for only ten years. The purchase of Holizan in bulk by the government would be its largest break in the pharmaceutical market. The minister knew that Rosendahl would not agree to supply Holizan at a price lower than what they had used to produce the medicine. So her best option was to ask a generic company in a neighboring country to produce a medicine to similar Holizan at a cheaper price. The laws of Mubanda gave the minister the ability to go against the patent rights of a company without permission if there was a national threat to the country. This term was in line with that of WTO the only difference being; WTO provided that an agreement should be sought for first before undertaking any action. Rosendahl’s on the other hand was facing mixed emotions. The managers and stockholders, on one hand were ecstatic that their drug Holizan would minimize the effects of SALS; such an achievement would put the company in a higher position and increase its success and profits. But on the other hand they were worried that the minister would not falter in her quest to save her country by giving them a moment’s notice to ask for permission to develop a replica of Holizan. While approaching the ethical issue in the organization, it is important to note that the problem can be individual or communal. An organization is responsible for its own moral responsibility. However, the problem is normally an individual responsibility. It is also important to note that not all companies and organizations always aim at making profits and interest for their stakeholders. In addition to this, we realize that organizational life and our normal lives are not much different since our lives incorporate our day-to-day activities. Rosandehl’s CEO, Mr. Elliot knew that the South African company given the tender to produce the drug might sell the replica to other countries. The generic company would also continue producing the similar version of Holizon even after the disease in Mubanda had been eradicated. This would decrease the earnings of Rosendahl from Holizan affecting its marginal earnings. This meant that the pharmaceutical market would have a cheaper version of Holizan and affect the market for original Holizan internationally. Elliot knew that other countries such as the U.S were waiting to see what they would do. The company was under intensive pressure to make profits to widen their scope of supply. Countries were worried about the situation in Mubanda and were looking for ways to curb the epidemic. He knew that many of these countries were against WTO’s provision of patent right violation and would agree with Rosendahl’s move. In the long run, if Rosendahl refused to allow the production of a generic version of Holizon or refuse to lower their prices. The effect would be judgment from other African countries and a decrease in profits because people would refuse to buy the drug. On the other hand the company would never know if their drug is effective in curing SALS. Many pharmaceutical companies have been forced to reduce their regulations on patent right control. This is mainly to allow the third world countries access the drugs at a cheaper price. For example in 2006, the Bristol-Myers Squibb Company agreed under pressure to allow other pharmaceutical companies to produce a generic version of the AIDS drug. Atanazavir was an invention by Bristol-Myers Squibb; the price was too high for African countries to purchase it. Therefore the companied allowed two generic companies, one in India and the other in South Africa to produce the similar drug and sell it at a cheaper price (Jr.). The only option available was to allow the production of a cheaper version of Holizon by a generic company in South Africa. But first of all they would need to hold a meeting with the health Minister and set down their terms and conditions. These terms and conditions would be binding once they came to an agreement with the minister. The generic company would then be asked to produce enough for Mubanda and once the problem was solved, to stop its production. This move would save the company from losing its product and also popularize the efficiency of Holizan to other countries. Mr. Elliot would also advocate for reduction in the prices of Holizan as a long-term strategy of ensuring that the interests of investors and the company are fulfilled. Management plays a vital role in promoting good ethical behavior at work because all the stakeholders of the organization are under a code of ethics that directs and shape their behavior (Jack Friday, 2013). Therefore it was upto Elliot to ensure that no employee decided to sell some of their products to Mubanda hospitals at a throw away price. Long term profits meant a long time competitive advantage in the pharmaceutical market through production of other new drugs. Works Cited Jack Friday. GlaxoChinaGate contd. - Behind the China Bribery Scandals. 23 August 2013. 2013. . Jr., DONALD G. McNEIL. Bristol-Myers Allows Powerful AIDS Drug to Be Sold Cheaply. 15 February 2006. http://www.nytimes.com/2006/02/15/international/africa/15aids.html?_r=0. 3 May 2014. World Health Organization. Globalization, TRIPS and Access to Pharmaceuticals. 10 March 2001. www.who.int/medicines/library/edm_general/6pagers/PPMo3%20ENG.pdf. 3 may 2014. Read More