One of the scientists working in the R&D laboratory of a major pharmaceutical company discovers that one of the company’s best selling veterinary drugs has the potential to cure a currently incurable liver disease which is prevalent in tribal areas. However, developing a variant of the drug suitable for human beings entailed a lot of research and development, having a huge expenditure to the extent of Rs. 50 crores. It was unlikely that company would recover the cost as the disease was rampant only in poverty stricken areas having very little market otherwise. (15 Marks) If you were the CEO, then; (a) Identify the various actions that you could take (b) Evaluate the pros and cons of each of your actions

(a) Identify the various actions that you could take

First action:

My first action would be to adhere to my obligations and professional ethics, which is to serve my company and to garner its maximum profit. However, this should not be contradictory to my personal ethics which derives from my societal obligations and my conscience.

Thus, I will do a cost-benefit analysis on the profitability of the medicine, as the medicine can be subsidized by govt. under their public health services. To cover for the gaps in coverage and access, additional pathways such as charitable trusts, NGOs etc. can be explored.

Second action:

However, if bridging the costs and earning a profit is not possible, I will try to cover the viability gap under my company’s corporate social responsibility so that my company retains the patents for that drug while allowing affordable access to those who need it most.

Third action:

Still, if CSR obligations are inadequate for bridging the costs, and my company is not in a position to take on the financial burden for research and production of this drug, I will put the information in the public domain so that generics can be manufactured.


(b) Evaluate the pros and cons of each of your actions

Pros and cons

First action:

  1. This will ensure that I fulfil my professional obligations as a CEO, while also ensuring fulfilment of my personal ethics, which is empathy and compassion for the vulnerable.
  2. If the first is not feasible, my second action will also ensure both my professional and personal ethics are met, as it will generate goodwill for the company instead of profit, and ensure affordable access for the vulnerable, along with retention of intellectual property rights by my company.
  3. This last action, which is to be undertaken by me in the absence of feasibility of others, will ensure public goodwill for my company as well as affordable access. Compromises have to be struck between the profit motive of my company and the public good in a way that both benefit from each other in a complementary manner. This will also create a precedent for others to follow who are faced with such a dilemma thus increasing social capital and trust in society.


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4 years ago


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