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29 Aug 2024
GS Paper 4
Case Studies
Day 46: A well-known pharmaceutical company in India, XYZ Ltd., developed a new drug intended to treat a common ailment and successfully received approval to market it in several international markets. The drug quickly gained popularity abroad due to its effectiveness and minimal side effects. Building on this success, XYZ Ltd. sought and received approval from the domestic regulatory authority to launch the drug in India, promising Indian consumers the same high-quality product.
However, after several months of domestic sales, a random inspection by the Drug Regulatory Authority revealed significant discrepancies between the quality of the drug sold in India and the internationally approved version. This allegation incited public outrage, causing a severe decline in the company's market share and damaging its reputation both domestically and internationally, necessitating a significant reduction in manpower costs.
In the given scenario :
A. Analyze the ethical dilemmas faced by XYZ Ltd. in this scenario.
B. What steps can XYZ Ltd. take to manage the crisis, rectify the situation, and restore its lost reputation?
C. What actions should the Drug Regulatory Authority take against XYZ Ltd. for violating domestic drug quality standards and distributing substandard products in the domestic market?
Approach
- Give a brief introduction about the case involved.
- Mention the ethical dilemmas faced by the XYZ ltd.
- Highlight the steps taken to manage the crisis and restore reputation
- State the actions taken by the Drug Regulatory Authority
- Conclude suitably
Introduction
In the pharmaceutical industry, maintaining consistent quality across markets is not only a matter of compliance but also a reflection of ethical responsibility. XYZ Ltd.'s situation highlights the complex ethical dilemmas that can arise when discrepancies in drug quality occur between international and domestic markets. This scenario calls for a critical examination of the company's actions and the broader implications for public health and corporate integrity.
Body
Ethical Dilemmas Faced by XYZ Ltd.
- Quality Discrepancy vs. Corporate Responsibility: Lowering domestic drug quality affects fairness and breaches corporate responsibility.
- Maintaining high-quality standards is essential for ethical practices and consumer protection.
- Consumer Trust vs. Company Reputation: Selling inferior products diminishes consumer trust and harms the company's reputation.
- Preserving reputation requires consistent product quality and transparency to retain consumer confidence.
- Unethical Marketing vs. Ethical Standard: Using inducements to influence healthcare professionals compromises ethical standards.
- Adhering to ethical marketing practices is crucial for maintaining integrity and professional trust.
- Executive Accountability vs. Ethical Commitment: Ensuring that executives genuinely commit to ethics is challenging, especially in light of quality issues.
- Executives must lead by example and enforce ethical practices across the organization to restore trust.
Steps to Manage the Crisis and Restore Reputation
- Immediate Recall and Apology: The company should recall the affected drug batches in India and issue a public apology, reaffirming its commitment to quality and consumer safety.
- Rectify discrepancies between domestic and international drug versions to restore product quality and consumer trust.
- Independent Audit: XYZ Ltd. should initiate an independent audit of its manufacturing processes to identify the root cause of the quality issue and implement robust corrective measures.
- Establish an internal ethics committee to oversee adherence to ethical guidelines, investigate breaches, and implement corrective measures.
- Compensation and Support: Offering compensation and medical support to affected consumers would demonstrate the company’s accountability and commitment to public welfare.
- Rebuilding Trust: Through transparent communication and CSR initiatives focused on healthcare improvement, XYZ Ltd. can work to rebuild trust with consumers and regulators.
- Pharma associations have established five-member ethics committees to monitor, enforce the UCPMP (Uniform Code for Pharmaceutical Marketing Practices), and address any breaches.
- Coordinate with the Department of Pharmaceuticals for risk-based audits to monitor ongoing compliance and address any further discrepancies effectively.
- Collaboration with External Agencies: Engage external agencies to review and improve compliance processes, ensuring that ethical standards are met consistently.
Actions by the Drug Regulatory Authority
- Penalties and Sanctions: Impose strict penalties on XYZ Ltd. for violating drug quality standards, including fines and temporary sales suspension, is essential to uphold regulatory integrity.
- Mandatory Quality Assurance: Enforce rigorous quality assurance protocols for future drug production by the company, with regular inspections, will help prevent recurrences.
- Public Awareness: Issue a public warning about the substandard drug is crucial to protect consumers and ensure that XYZ Ltd. addresses the quality issues promptly.
- Compliance Monitoring: Ensure continuous monitoring of XYZ Ltd.’s adherence to domestic quality standards.
Conclusion
John Stuart Mill’s utilitarian principle, “The greatest happiness of the greatest number is the foundation of morals and legislation,” emphasizes that the ethical assessment of XYZ Ltd.’s actions should focus on their impact on the public. The quality discrepancies in the drug have caused potential harm to Indian consumers, eroding their trust and well-being.
To align with utilitarian ethics, XYZ Ltd. should address these ethical issues by ensuring their products meet high standards and work towards enhancing the overall well-being of their consumers
