One of the scientists working in the R&D laboratory of a major pharmaceutical company discovers that one of the company’s bestselling 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 the company would recover the cost as the disease was rampant only in poverty-stricken areas having very little market otherwise.

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

Ethics

Ethics: Case Study

2015

20 Marks

The case presents a pharmaceutical CEO facing a critical decision between profit maximization and social responsibility when a veterinary drug shows potential to cure an incurable liver disease affecting tribal populations, requiring substantial investment with minimal financial returns.

Stakeholders

Primary Stakeholders: Tribal communities, company shareholders, scientist, CEO, employees
Secondary Stakeholders: Government, healthcare system, pharmaceutical industry, NGOs, media

(a) Various Actions Available

Complete rejection of human drug development
Full-scale independent development with Rs. 50 crore investment
Public-private partnership with government agencies
Licensing the formula to generic manufacturers
Phased development with external funding sources
Corporate social responsibility initiative with partial investment

(b) Evaluation of Pros and Cons

Option 1: Complete Rejection of Development

Pros	Cons
Protects shareholder interests and company profits	Violates ethical duty to save lives when solution exists
Maintains focus on profitable ventures	Damages company reputation and social license
Avoids financial risk and uncertain returns	Perpetuates health inequity in tribal areas
Preserves resources for other R&D projects	Contradicts Article 21 right to life principles

Option 2: Full Independent Development (Rs. 50 Crores)

Pros	Cons
Fulfills dharmic obligation to serve humanity	Massive financial burden threatening company viability
Establishes company as socially responsible leader	Shareholders may face reduced dividends and returns
Potential long-term goodwill and brand value	Uncertain recovery timeline in poverty-stricken markets
Aligns with utilitarian principle of greatest good	May compromise other profitable research projects

Option 3: Public-Private Partnership with Government

Pros	Cons
Shared financial burden reducing company risk	Complex bureaucratic processes and delays
Government support ensures wider distribution	Potential intellectual property sharing concerns
Aligns with National Health Mission objectives	Limited control over pricing and marketing decisions
Creates sustainable model for future developments	Dependency on government policy changes

Option 4: Licensing to Generic Manufacturers

Pros	Cons
Immediate revenue through licensing fees	Loss of direct control over quality standards
Faster market penetration through multiple players	Reduced profit margins compared to direct sales
Minimal additional investment required	Potential reputation risk from generic quality issues
Enables affordable pricing for tribal populations	Limited ongoing revenue stream

The public-private partnership approach emerges as most viable, balancing deontological duty to preserve life with practical sustainability. As Mahatma Gandhi said, "The best way to find yourself is to lose yourself in the service of others," reflecting the transformative potential of ethical business leadership.

Answer Length

Model answers may exceed the word limit for better clarity and depth. Use them as a guide, but always frame your final answer within the exam’s prescribed limit.

In just 60 sec