A case study is a comprehensive and in-depth examination of a particular subject, often within its real-life context. It serves as a methodological tool to explore, analyze, and understand complex issues or phenomena, ranging from individual experiences to organizational challenges. Typically employed in various academic disciplines, business settings, and scientific research, a case study involves an extensive investigation that aims to provide a detailed account of the subject under scrutiny. By delving into the intricate details of a specific case, researchers can uncover valuable insights, draw conclusions, and offer practical solutions. This method offers a holistic approach, allowing for a nuanced understanding of the multifaceted factors influencing the subject, making it an invaluable tool for gaining knowledge and informing decision-making processes.
Q11. 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 the company would recover the cost as the disease was rampant only in poverty stricken areas having very little market otherwise. (250 Words, 20 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.
Tags: Case Studies
Case Summary:
I am the CEO of a major pharmaceutical company. One of the scientists in my company discovers a potential drug to cure a currently incurable liver disease. Developing the variant of drug required R&D worth extending Rs. 50 crores. The Company cannot recover the cost as there’s little market since disease is only prevalent in tribal areas.
Stakeholders: Pharmaceutical Company ,CEO of the company, Scientist working in the R&D laboratory, people living in the tribal areas.
Ethical Issues/Ethical Dilemmas: Professional Ethics v/s Personal Ethics
(a) Identify the various actions that you could take;
Pharmaceutical companies have a social responsibility to make a valuable contribution to society by developing and marketing medicines which improve people’s lives. In the above case study the pharmaceutical company has the technology for creating a medicine that can be useful for treating liver patients but due to paucity of funds the company is not able to develop the medicine. Hence the CEO of the company can take the following steps for arrangement of funds:
- He can move to the government for funds for research and development by giving a suitable presentation related to the benefits of drugs for society. The government can provide the fund in PPP mode or as Viability Gap Funding.
- Further the development of medicine will help the government in fulfillment of his duty towards the society. But the government may not be able to provide funds as funds for R & D in the budget is very low and also may get delayed because of the bureaucratic hurdles.
- He can go to a private company with a large base and collaborate with them in research and development. He can provide them details about his research findings and get the drug released in the market.
- But since the private companies work for profit, it may not provide the medicine at subsidise rate to the tribals and the company might release the drug under its own brand name and his research may not be acknowledged.
- In case he does not get cooperation from above two steps, he can approach other local financial institutions to provide funds for research. The drug though, at present is likely to benefit a very small section of society but in the longer run it is possible that the drug may prove useful to other sections and to the society at large.
(b) Evaluate the pros and cons of each of your actions.
Evaluation of the consequences is as follows:
Action Plan 1: Taking benefit of the subsidy from the government.
Merits: This would help the poverty-stricken tribals to recover from the disease and also ensure my company’s money is recovered.
Demerits: My company won’t be able to make exorbitant profits.
Action Plan 2: Company’s policy of Corporate Social Responsibility(CSR).
Merits:
- This will build a soft place for the company in the minds of the people. It will help the other products and increase the status of the company.
- At a cost of 50 Crores plus Ad spends, this has the potential of giving a boost to the company’s image in the country as well as on the global scale. Whatever is lost in cash would be gained in the form of a positive brand image.
Demerits:
- Loss/Expenditure to the company in the short run.
- This endeavor stands the chance of being totally neglected by the media and public alike. There’s a possibility that nobody would care if a company dedicated a drug to fight a disease in some obscure tribal area. The financial risk of the project is inflated further.
Action Plan 3: Collaboration with a Foreign Firm.
Merits:
- Not just the poor of India, but the whole world will benefit.
- The problem can be solved in a holistic manner.
Demerits:
- Issues of Intellectual property rights may obstruct the functioning of this collaboration.
- Foreign companies may sell the drug at higher prices.
Action Plan 4: Help from common people and funds through sale of products.
Merits:
- Pool for social activities will be created.
- Good publicity of the company will be ensured through this initiative.
- Increase in sales and profits which then could be transferred to the project.
Demerits:
- It may also decrease the sale as the price of the company’s products will be increased.
- This may take a long time to collect necessary funds for the project implementation.
To 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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