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Topic: Business Ethics and Social Responsibility

Business Ethics and Social Responsibility

Module Assignment Briefing

The module is assessed by an individual essay that is limited to a maximum of 4000 words, excluding the word count for your References.

In this assignment brief there are two case studies for Merck & Co., Inc., the US based pharmaceutical company,together with a background review of the organisation.For this assignment, you are to undertake an investigation of Merck. In this, you are to identify the current ethical stance of the company and the structures, processes, and procedures they have in place to maintain this.

You will also need to evaluate these two cases from an ethical and CSR standpoint, to report your findings and to compare and contrast these with their current position. In order to facilitate your discussion, four separate questions are also present to act as a focus for this part of your essay.       

Background

Merck & Co., Inc. is a Fortune 500, US based pharmaceutical company from New Jersey. Itsorigins go back to the Merck family in Germany in the 17th century with it beingfounded as a producer of pharmaceutics in 1827. An American based subsidiarywas introduced in 1891, with this beingexpropriated by the US government in WW1 andsubsequently established as a private trading company in 1917. It merged with Sharpe & Dohme, Inc. in 1953 andbecame a public limited company in January 1978, with an IPO on the New York Stock Exchange. It trades as a d.b.a. as Merck, Sharp & Dohme outside of the US and is currently the seventh largest pharmaceutical company in the world with worldwide sales of $46.8B in 2019.

Although a for-profit organisation, it has a long-standing reputation of benevolence and civil responsibility as evidenced by the establishment of the Merck Company Foundation in 1957. The Foundation has declared donation in excess of $800M to registered charities and not-for-profit social enterprises since its inception. This is consistent with the company’s philosophical position of “ [ … ] medicine is for the people” and, more specifically; “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. How can we bring the best medicine to each and every person? We cannot rest until the way has been found with our help to bring our finest achievements to everyone” (Georg W. Merck, 1950).

n.b.Merck & Co.  should not be confused with the, still trading, multinational German former parent company, MerckKGaA.

Case 1

In 1999, Merck received approval from the US Food and Drug Administration (FDA) for the distribution and sales of their non-steroidal anti-rheumatoid arthritisdrug (NSAID), rofecoxib. This commercial drug (retailed as Vioxx) was then sold in over eighty countries with yearly revenue totalling $2.5B, by 2003. Over this period, evidence from independent researchers and Merck’s own scientists strongly suggested that the drug significantly increased the risk of myocardial infarction(heart attack) and(ischemic) strokes after eighteen months of treatment (see also, Bresalier et al., 2005).Merck continued, however, to market and sell the drug until 30 September 2004, when they voluntarily withdrew rofecoxib from the market.  As a result, the share price of Merck fell overnight, substantially. In the next year, this was followed by another fall due to the US courts judging that a resident had died as a consequence of use of the drug. By 2016, it is estimated that Merck have paid $8.5B in compensation for the continued sales of the drug after contraindications of its effects were first noted.

Question 1:Given Merck’s stated ethical philosophy to consumers of its products, discuss their initial decision to market the rofecoxib drug from a normative ethical and deontological perspective. [You MUST justify each of the theories you use from the company’s perspective and whether you consider these to have been reasonable at the time of launching the product on the market.]

Question 2: Assuming that suitable prior clinical trials of the drug were undertaken and reported to the US Food and Drug Administration (FDA), did the FDA have any responsibility to impose restrictions and monitoring of the drug usage?[Fully justify your answer from an ethical perspective.]

Case 2

In 1987, the World Health Organisation (WHO) estimated that 18 million people, in over thirty developing and emergent economies, were infected by onchocerciasis – colloquially known as “river blindness”. River blindness is caused by transfer of a worm, by a bite from a Black fly. The worm then matures inside the human host’s body and lays millions of larvae and it these that can cause permanent blindness.

In the 1970s, Merck had developed the drug, ivermectins(retailed as Mectizan), that killed the worm’s larvae and stopped further production of larvae in the host. Application of the drug was also only required, annually. The problems with administration, however, where that: those infected were typically located in isolated and hard to reach communities; the governments of these individuals were unable to meet the relatively high US costs of the drug; they resided in areas that were politically unstable and volatile, and; had insufficient infrastructures for health care and drug distribution of the drug.

In October 1987, Merck announced that it would supply Mectizan, free of charge, and for as long as necessary, to needy cases and would pay the distribution and administration costs.

To achieve the latter, it formed a donation partnership programme with the WHO, UNESCO, World Bank, and numerous private and public stakeholders including local health workers. By 2015, Merck had provided more than two billion treatments to 98 million patients in over thirty countries. The programme has proved so successful that Merck has extended their benevolence to address lymphatic filariasis, more commonly referred to as Elephantiasis. 

In recognition of his scientific research work at Merck in the 1970s that led to the development of ivermectins, and hissubsequent instrumental role in their decision to make the drug available, free of charge, for people without the resources to pay for treatment, William Campbell,received the Noble prize in 2015.

Question 3: As a registered for-profit organisation that is making considerable profits on its drugs, does Merck have an ethical obligation to distribute its products free to those who are suffering but cannot afford to pay for treatment? [You need to provide ethical justifications in support of, and those opposing, this practice.]

Question 4: From a corporate social responsibility perspective, would you consider the support for eradication of “river blindness”to be instrumental or normative. [You MUST fully justify your arguments.]

Reference

Bresalier, R.S, Sandler, R.S., Quan, H.,Bolognese, J.A., Oxenius, B., Horgan, K.,

Lines, C., Riddell, R., Morton, D.,Lanas, A., Konstam, M.A., & Baron, J.A. (2005). Cardiovascular Events Associated with Rofecoxibin a Colorectal Adenoma Chemoprevention Trial, New England Journal of Medicine, 352: 1092-1102.

Indicative Marking Scheme

Current ethical positionand comparisons [30%]

Justifications and academic underpinning, including evidence of independent research for issues raised in:

Question 1[25% ]

Question 2   [10% ]

Question 3[15% ]

Question 4 [20% ]

Type of service-Academic paper writing
Type of assignment-Coursework
Subject-Business
Pages / words-15 / 4000
Academic level-Master’s
Paper format-Harvard
Line spacing-Double
Language style-UK English

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