Model Answer
0 min readIntroduction
The pharmaceutical industry operates within a unique ethical landscape, balancing the need for innovation and profitability with the imperative to improve public health. The discovery of a potential cure for a debilitating disease, even in a limited population, presents a significant ethical dilemma. This case highlights the tension between shareholder value and social welfare, a common challenge for corporate leaders. The question requires a careful consideration of various courses of action, weighing their potential benefits and drawbacks, and ultimately, justifying a decision based on sound ethical principles and a pragmatic understanding of the business environment.
Identifying Possible Actions
As the CEO, several actions could be taken:
- Action 1: Proceed with R&D for Human Use: Invest the ₹50 crores to adapt the veterinary drug for human consumption.
- Action 2: Abandon the Project: Discontinue research, citing lack of commercial viability.
- Action 3: Seek Government/NGO Funding: Approach government health agencies or philanthropic organizations to fund the R&D.
- Action 4: License the Drug: Offer a non-exclusive license to another company or research institution willing to pursue human adaptation.
- Action 5: Limited Distribution & Subsidization: Develop the drug and distribute it at a subsidized rate, accepting lower profits.
Evaluating the Pros and Cons of Each Action
A detailed evaluation of each action is presented below:
| Action | Pros | Cons |
|---|---|---|
| Proceed with R&D | Potential to save lives and alleviate suffering; Enhanced company reputation (CSR); Long-term goodwill. | High financial risk; Unlikely to recoup investment; Potential shareholder dissatisfaction. |
| Abandon the Project | Avoids financial loss; Maintains focus on profitable ventures; Satisfies shareholders. | Ethically questionable; Missed opportunity to alleviate suffering; Negative impact on company reputation. |
| Seek Government/NGO Funding | Reduces financial burden on the company; Aligns with social responsibility goals; Potential for wider impact. | Funding may not be secured; Lengthy bureaucratic processes; Potential loss of control over the drug’s development. |
| License the Drug | Avoids R&D costs; Allows another entity to pursue the cure; Maintains some level of social responsibility. | Loss of potential profits; Reduced control over drug quality and distribution; Potential for exploitation by licensee. |
| Limited Distribution & Subsidization | Provides access to the drug for those in need; Demonstrates social responsibility; Maintains some profitability. | Lower profit margins; Logistical challenges in reaching remote tribal areas; Potential for drug diversion. |
Ethical Frameworks & Considerations
Applying ethical frameworks helps clarify the decision-making process:
- Utilitarianism: The action that maximizes overall happiness. Proceeding with R&D, even with financial risk, could save lives and thus maximize happiness, outweighing shareholder losses.
- Deontology: Focuses on moral duties and principles. The company has a moral duty to alleviate suffering, regardless of profitability. This supports proceeding with R&D or seeking alternative funding.
- Virtue Ethics: Emphasizes character and moral virtues. A virtuous CEO would prioritize compassion and social responsibility, leading to a decision that benefits the tribal population.
My Decision & Justification
If I were the CEO, I would pursue Action 3: Seek Government/NGO Funding, coupled with a commitment to Action 5: Limited Distribution & Subsidization if funding is partially secured. This approach balances ethical considerations with business realities. Abandoning the project is unacceptable given the potential to save lives. Solely funding the R&D is too risky for the company. Seeking external funding demonstrates a commitment to social responsibility while mitigating financial risk. A subsidized distribution model ensures accessibility for the target population, even if it means lower profits. I would actively engage with the Ministry of Tribal Affairs and relevant NGOs like the Bill & Melinda Gates Foundation to explore funding opportunities.
Conclusion
This case underscores the complex ethical challenges faced by pharmaceutical companies. While profit is a legitimate business objective, it should not come at the expense of human life and well-being. A responsible CEO must consider the interests of all stakeholders and strive for solutions that balance economic viability with social responsibility. Proactive engagement with government and philanthropic organizations is crucial for addressing healthcare disparities and ensuring access to life-saving treatments for vulnerable populations. The long-term benefits of a positive reputation and societal impact often outweigh short-term financial gains.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.