About Authors:
PANKAJ MUSYUNI*, PROF. (Dr.) B.P. NAGORI1, Mr. AKASH MIDHA2
*M. Pharm. (Pharma Management & Regulatory Affairs)
1 Director, Lachoo Memorial College of Science & Technology
2. Lecturer, Lachoo Memorial College of Science & Technology
Lachoo Memorial College of Science & Technology
‘Pharmacy Wing’, Jodhpur, Rajasthan
INDIA
ABSTRACT
Ethics can be explained as branch of philosophy related with the implication of all aspects of human behavior and nature. The purpose of this paper is to present an overview and relevance of business ethics in management and pharmaceutical industry scenario. The rationale of business can not be only illustrated by profit maximization but also by the social concern of the organization. This paper demonstrates the concept of business ethics with various attributes, factors and impact on society and also emphasize on code of ethics and its importance. Present paper also discusses common ethical problems within a pharmaceutical organization. A practical approach as case studies related to pharmaceutical industries will identify the issues and implications for ethical development, advancement and globalization of business ethics. Concept of paper focuses attention on the development of an attitude which should be adopted to understand various terms of ethics and development for social and business concern.
Reference Id: PHARMATUTOR-ART-1146
Introduction
A major attributes towards transformation in business aptitude is change. Change is a constant and definite term which also affects the fundamental style of working. The changing scenario particularly in economical, political, legal and social environment always made the business and businessman to approach towards ethical point view to business. Therefore business motto tends towards goal of maximization of profit and wealth along with ethical issues to achieve them1. This concept also leads to generate an unquestionable link in different human mechanism and intellect. The rapid changes in human living, society establish and approach towards sensible relationship for business aptitude.
It is now realized that ethics is virtually important for any business and in turn for progress and enhancement of any society. Ethics make an efficient economy and in combination with profit, it carries business towards a long run. Ethics can protect the human values and society. An ethically responsible organization always has a culture for betterment of the people and society. Ethics also influence economy and further leads to smooth functioning in an organization. Ethical behavior promotes the quality of life.
The basic purpose of business is optimization of various economic activities which is concerned for evaluation of business techniques2. Economic environment, a complex phenomenon deals the business with government, public, society and community which can influence the structure and system of country. For an organization people are stone pillars and they need and desire to be ethical in private and public life. Unethical behavior by means in any organization ultimately leads to detrimental towards business and society.
The era of business ethics is quite broad and includes various aspects of business society relationship. Social responsibility involves ethics and morality. Although it is always difficult to understand for a businessman about what is ethical and what is not ethical3. Similarly business society relationship cannot be understood without appropriate knowledge of ethics. In a normal view one can say that the business ethics is simply expectation of society from business.
What is Business ethics?
Ethics may be defined as the study of standards of good conduct and moral judgments. Ethics is the practical study of what ought to be, what is the ultimately good and how to optimize and achieve it. It is the general opinion that the primary concern of the business is to serve the society4. Business must have a social concern and commitment to enjoy social wellbeing.
Ethics can be defined as the study of human actions in respect of being right and wrong. It also formed ultimate values, goals and optimize techniques to opt the same. Thus, it has a greater impact on organization, management and society.
Ethics is a compilation of various moral principles or sets of values about what conduct ought to be achieve professional attitude. Ethics may be a written or unwritten set of codes or principles which governs business or any profession. Ethics is a study that makes good and bad conduct, including various related values. It has to do with maintaining the relationship with people and society at large and when this concept is applied in a business context, it becomes business ethics.
Business ethics has become one of the major challenging issues confronting the whole business world. To establish ethical climate in any organization is seems to like starting an endless race as it depends on individual’s behaviors also5. The very first criteria should be to modify unethical behavior and this can be considered as an ‘on going process’ which never stops. Ethics may be an agreement between the business and the served community which based upon certain standards of philosophy. An effective program always requires participation and commitment from all which constituents ethical behavior at all levels. Maximization returns in term of profit and social judgments only can be achieved ethically.
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ATTRIBUTES OF ETHICS6
Concept:The ground of ethics may be treated as a regulation, science, study or evaluation.
Content:The ethics is concerned with what is good or bad, right or wrong.
Judgment:Judgment is vital to establish whether human action is ethical or not.
Standards:standards always results oriented from judgments.
Values:The final element of ethics is the set of values and criteria used as standards for human conduct judgments.
IMPORTANCE OF BUSINESS ETHICS AND IMPACT ON SOCIETY
Human aspects and ethics can be interrelated as mostly people want to be ethical in their private as well as in their social, business life. All human activity can be beneficial to the organization and in turn society where people approach their purpose a a part and parcel of their work and related environment. Ethical needs are basically most logical reason for concern on behalf of organization7.
Ethics can create integrity with the public as it always influenced by various parameters as social systems, movements and preferences. Moreover, it is a fact that no business can survive without social agreement and balance. Ethics along with social responsibility are optimum to overcome the competitive environment.
Similarly, Ethics can create trustworthiness with employees also. A common style for a company and its employees looks for common concepts, content, standards, values and hence goals with maximization of profit. Management can enjoy integrity with its employees as it enjoys the same with public.
Further, ethics help in better decision making in a broad way. All ethical decision will be in favor of shareholders, stakeholders, public and employees. It is due to the reason that for an efficient operating economy and business purpose ethics are mandatory. These will force the management to consider all economical, social and ethical aspects. Thus, in order to have a smooth, efficient and improved economy ethics is a better option to opt.
EHICS IN MANAGEMENT
Ethics and ethical behavior are essential parts of a sound management .From management point of view ethics is an integral part of long-term success in the business world8. Ethics can be considered as basic principles of conduct which are used to govern the behavior of an individual or group of individuals. It is also concerned with the decision making approach within an organization9. This, in turn has significant implications for organization stakeholders, shareholders, shareholders, suppliers, customers, employees, government and society or public. Thus, it is mandatory to develop code of ethics for better and efficient decision making.
Following are some approach criteria to achieve ethical decision in business organization
Legality - does the decision affect the legal system?
Fairness - how will decision affect those who are involved in it?
Self-respect - does decision shows better option and its consequences?
Long term effects - how does the decision’s prediction stay as long term effects?
CODE OF ETHICS
Code of ethics10 can be defined as a written document that outlines the principles of conduct to be used for making decision. A business’s ethical standards must be compatible with common morality issues. Generally code of ethics is based on approaches as justice, individual rights and utilitarianism.
WHY HAS A CODE OF ETHICS?
To define accepted/acceptable behavior
To promote high standards of practice
To provide a benchmark for members to use for self evaluation
To establish a framework for professional behavior and responsibilities
To medium for occupational identity
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SUGGESTIONS FOR WRITING CODE OF ETHICS
Guidelines should be according to keeping the view of employees, customer and society. Following criteria as a suggestion can be approached for writing code of ethics11, 12
What will be the rationale of code of ethics?
Is it to regulate behavior or performance or to inspire?
Is documentation intended to motivate and guide people or to set out just requirements?
What is the purpose of Code of Ethics that you desire? Either you have option of creating a statement of values, a policy, a mission statement and a code of conduct.
A code of ethics should be customized to the requirements and values of organization.
Basically many ethical codes approach two components. First, an inspirational section, that gives the guidelines what the organization aspires to. Second, ethical codes will typically having some policy or regulations, which members of the organization will be likely to hold on to it.
Whether an ethical document includes any sort of enforcement? If so, what kind of is it?
How will the code of ethics be implemented?
Confirmation of the fact that the values incorporated in ethical code get implemented in organizational policies and actual practices.
How / when will the code be reviewed or revised?
COMMON ETHICAL PROBLEMS WITHIN CORPORATIONS
Social impact of business is increasing day by day. Business ethics is now emerging as a distinct area with exploring the moral principles which evaluate organization and there relation with society.Ethical problems can be categorized in four types that are commonly found in business organizations13.
First is the human resource problem which relates to the reasonable and just treatment of existing and potential employees. Unethical behaviour involves treating people unfairly because of their gender, complexion, religion, ethnic background, and so on14.
Second one is conflicts of interest, when particular individuals or organizations are giving special treatment due to personal relationship.
Third ethical problems are that involve customer confidence. Organizations sometimes deal in such a ways that shows lack of attention on customer orientation or concern with public safety.
Finally, the ethical problems including the use of corporate capital by employees who make private phone calls at work, submit counterfeit expenditure claims, take concern stationery to home, etc.
ETHICAL CONSIDERATION FACTORS
An ethical consideration depends on group and structure of organization, economic cluster, type of industry, professional group and its attitude and so on. Business ethics has to be complying with the certain standards of the society and environment in which it operates15. It is mandatory that the business adheres to the deep-rooted code of ethics. The following are the factors that create the basis to ethical consideration (a) Culture (b) Value and (c) Transformation.
CULTURE
Culture can be illustrated as human environment of human beings. Basic concept of culture is to maintain a set of relationships that makes human beings to create a society. This society collects various learning which continue from one generation to another. Culture also refers to various activities, thought processes; various feelings on ground of physical, mental and emotional era which is acquired by members of the society. Ethical attitudes are different for different people. More attention should be given in `these aspects for developing, building and maintaining the relationship and less emphasis on moral issues.
TRANSFORMATION
Transformation in turn depends on culture and values aspects for any organization. Transformation regarding various factors as communication, raveling, purchasing, working, playing and exchanges leads to change in ethics and ethical practices. The growth and development in such areas brought rapid changes for nation, society, public and business. These transformation leads to improved life style and quality of life, which in turn creates revolutionary cultural change in all ethical standards. Change which is continuous parameter in man’s life along leads to transformation.
VALUE
Values are add-ons or accretions to the personal image. Values are not fixed; they change accordingly to the surrounding environment. Various types of values can be observed in an organization like competency, integrity, responsibility, aspiration, uniqueness, equality, accuracy, respect, dedication, diversity, improvement, satisfaction, loyalty, reliability, innovativeness, collaboration, excellence, responsibility, empowerment, quality, efficiency, dignity, collaboration, stewardship, empathy, accomplishment, daring attitude, wisdom, independence, security, confront, influence, knowledge, consideration, friendliness, discipline/order, liberality, persistency, optimism, soundness, flexibility and so on.
Values has a direct impact on society as when values changes it modifies the culture also. Values are not only important for business relationship but also create integrity with the public and society. It creates more reliability by being morally dependable and answerable. This creates a confidence level in organization to all who are involved either directly or indirectly. It also creates uniqueness among employees approached towards a same goal.
Values added ethical oriented decision for policy making in the interest of public, employees, society and environment. Then it will make organization towards completing its economical, social, political and legal aspects.
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ETHICAL ISSUES IN PHARMACEUTICAL INDUSTRY
CLINICAL TRIALS: ETHICAL CONSIDERATION
With international movements towards innovation in pharmaceutical field, it is obvious that the number of clinical trials will increases16. However, a number of ethical and practical issues for conduction of clinical trials act as a barrier. Of course, research purpose involving children must benefit children, yet it must be well defined and designed. This ethical process encompasses technical review and ethical issues. The exploitation of individual to get optimum data should not be at the cost of danger to life or complex issues. The whole aspect must be concerned keeping the view of not only maximization of profit but the health benefit of the individuals involved.
ETHICAL ISSUES IN BIOPHARMACEUTICALS
The growth of pharmaceutical industry in recent time period introduced competitive and commercial environment for business and there is a challenging bioethical issues for industry17. Discovery, development, regulation and commercialization of pharmaceuticals products needs vast money, which generic drug manufacturing companies are fails to comply. Various ethical issues governed such broad areas can be of ethical social behavior types which includes openness of information and data sharing, less risks for patients and customers by quality improvement and much more by local investment steps to modify the social aspects.
INVENTION OF NEW PHARMACEUTICALS AND INTELLECTUAL PROPERTY RIGHTS
Intellectual property rights are intellectual asset18 of an individual or company whop sets and satisfy criteria for a new approach. In case of invention of any new pharmaceuticals, it always approaches towards novelty, non-obviousness and industrial application steps. Ethics are involved during invention where newness criteria must be satisfied only if the work is nor published or neither is in public domain in the world elsewhere. Yet some manipulation can be approached by pharmaceutical industry always in order to get monopoly rights as patents, trademarks and also for maximization of wealth leaving behind the customer satisfaction.
ETHICAL ISSUES CONCERNING RELATIONSHIP BETWEEN MEDICAL PRACTITIONERS AND PHARMACEUTICAL INDUSTRY
Medical practitioner and pharmaceutical industry19 shows interest and sometimes overlapping conflict. This association influence in a major way about clinical decision and way of research conduction. So, it must be included for medical practitioner and pharmaceutical industry that in view of risk of compromising relation with patients and integrity of research, doctors must exercise care when deals with industry.
The relationship between medical practitioner and pharmaceutical industry must be open and transparent. The specific issues on travel expenses, gift giving, sponsorship of seminar/conferences, continuation and promotion of educational activities overall deteriorate the health of public and also against the setup of code of ethics by business itself in both organization.
ETHICS IN PHARMACEUTICAL SALES
The pharmaceutical sales ethics is originate from the organizational ethics, which is a matter of system agreement, responsibility and traditions. The ethics formed is focused on the various legal requirement proposed by law and regulatory boards. The law however always sets a minimum standard and a higher ethical values should be demanded; from pharmaceutical companies by both agency and public demand across the world20. Organizational ethics are utilized to develop the marketing and sales strategy to both the healthcare profession and the public. Ethics within pharmaceutical sales has become a matter of public interest and the ethical conduct of the major pharmaceutical companies and the industry as a whole has been witnessed for unethical behavior within its sales and marketing practices.
SOME CASES OF UNETHICAL APPROACH OF PHARMA INDUSTRY
Pfizer agreed to pay$429 million to Park –davis, which promoted the neural drug Gabapentin. This drug was unapproved by U.S. Food and Drug Administration (FDA) for systemic use. Similarly, Medicaid was charged for millions for “off-label” use of the drug. In case of Atorvastatin, Pfizer was alleged to pay undisclosed cash discounts for continuing medical education to a managed care customer that affected the drug’s formulary status.
The drug Vioxx produced by Merck & Co. voluntarily withdrew the product from the market due to major side effects about cardiovascular system. This product gained attention due to off-label marketing promotion and series of allegations about preservation of drug information and its uses.
Eliot Spitzer from New York launched a court case against Glaxo Smithkline for suppressing negative information on their drug Paroxetine. It is an antidepressant drug and used for children and adults. Glaxo Smithkline settled the agreement by releasing summaries of all clinical trials to be published on its corporate website for its all approved products.
"AstraZeneca faced some charges of allegations during promotional event organization for its product Crestor. It was alleged for use of inappropriate gifts and also for invited physicians to attend the event and paid for their accommodation including even tickets to musical performance21.
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SERIOUS ETHICAL AND SOCIAL DILEMMA FOR PHARMA INDUSTRY
CONCERN OF PRODUCT OR PRODUCT MIX
Product development, designing, marketing and sales perspective largely depends on the consumer. Product identification in terms of formulation22, identified dosage forms, packaging advertisement are certain important factors. However, business solely depends on customer satisfaction and orientation. Some products as hair colours, baby foods, health drinks, hair removers, fairness cream can be categorized under semi pharmaceutical products. Need of such products demands serious ethical issue of concern.
MARKETING OF UNSAFE/RISKY DRUGS
There are many pharmaceutical products which are known to cause carcinoma, gastriritis, diarrohoea, allergy, headache, nausea, vomiitting, abdominal pain, Irritation, anxiety, are still manufactured and sold by the pharmaceutical industry. This really concern for an ethical debate. It is generally observed that the marketing strategies for such products deliberately misleading to consumers or intentionally they overemphasize the benefits of the product.
ECOLOGICALLY INCOMPATIBLE PRODUCTS
There are various products which relate to disposable items like surgical equipments, syringes and hospital residue along with microbial testing culture. Certain residuals products as after surgery and treatment of culture are not ecologically compatible products. The disposal of certain products is a big ethical issue for debate and concern23.
COST/PRICING ISSUES
Although cost of medication is governed by various laws and by laws, yet there is still enough scope to deduct the same. Most population cannot afford adequate health service and optimum results from the service. In case of Critical diseases such as cancer, HIV, AIDS, heart problems, rabies, and leprosy objective of pricing policy is a major ethical issue.
PRODUCT QUALITY
This issue is a major concern for generic drug manufacturing companies. With an opinion to grow and sustain in the competitive and challenging environment they differentiate their products by low pricing. Customers always satisfy when the product meets its criteria of ‘zero defect’. This trend can be generally observed in certain health nutrients drinks, vitamins, food supplements where adulteration and low quality products are big issues to be worry.
PRODUCT PROMOTION POLICIES
Aim of a promotion strategy is to motivate consumer to buy the products. This is also concerned to generate brand loyalty to its own product by company. The communication and promotion strategy is therefore very important for the business organization. The ethical dimension always suggest that the consumer must not be misguided the truth about the same. The strategy should be therefore open, transparent and ethically right. The societies have a tremendous faith in the healthcare profession24. Thus it’s a concern for promotional team that it should not hide truth to consumer about product which ultimately affects its life.
ETHICS INSTITUTIONALIZING WITHIN AN ORGANIZATION
A business oriented organization which critically desires to function in an ethical atmosphere has to institutionalize ethics by sketch up a company policy and code of ethics, familiarizing all concerned activities at all levels with the set up rules of ethics and ensuring the function and implementation of the same25. Code of ethics is a blue print of what is going to be adopted by the company in a unique manner from top to bottom management. The company’s ethical code must be printed and distributed to all those who deal with the company and should be displayed within organization, by clearly mentioning what are unethical conduct.
The company may also assign ethics committee which offer training within and outside the organization. The obligation of the committee is to give information from time to time to the Board and offer proposal for the betterment of organization. The committee must also revise the code of ethics by keeping an eye view with the changing business environment. Business ethics has to be experienced and preached. Before setting business standards, moral values and principles have to be internalized so that they become a part of the blood stream. If the corporate becomes dedicated to self-imposed values of business ethics the whole country’s values could be influenced.
GUIDELINES FOR ETHICS DEVELOPMENT PROGRAME
Merely set up of a standard code of ethics or copying same from another source will not sufficient to implement the business ethics. It is important to find out relevant areas for further guidance.
A prominent personality must be choosing to approve the business ethics policy within organization.
A general framework for organization must be selected according to different important constituents as shareholders, employees, suppliers, consumers, society or community and may be competitors.
The codes have approached through various departments in the organization and code of conduct must be framed in booklet form. It should be distributed to all concerned also.
Trainings programs should be focused for all concerned and review policy must be established and accordingly a head of policy maker must be appointed.
GLOBALISATION OF BUSINESS ETHICS
Today the international communication is very common and international travel is frequent. This phenomenon can be termed as globalization. It accomplishes the things sassier, cheaper and moreover quicker. It creates greater opportunity for trade and growth and composite of things.
Globalization is a medium which covers every aspects of civilized world where business plays a social role for growth26. Now the interest is going serious on such issues where government fails to come up with a solution. It is commitment of the business ethics to behave in a friendly, fairly and responsible medium for improving quality of social life.
Accountability and transparency are required for business to be socially responsible. The wealth maximization is just value addition to the business. So globalisation of ethics is necessary in order to meet the demand of globally need for steady and sincere law policy and governments. To provide transparency, integrity and openness to promote ideal ethics in governments27 and assurance to internationally recognized human rights and welfare. Also provides approach for developmental programs for the stability of environmental problems, pollution control, conservation and sustenance of economical values and new evolution set up for code of ethics for business organization.
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CONCLUSION
Societies always undergo social changes and it depends on the changing set of values. Ethics can be defined as the study of right or wrong. Ethical consideration decides society’s needs, so if value system and thinking of business go together, it always works.
Social and ethical changes in business have a greater impact on various economical, social, political, legal and cultural aspects of the society. The changes in all environment can be set up with an attitude of statement as “BE WELL-VERSED, BE CONCERNEDAND CREATES A VARIATION”. This ethical attitude provides upcoming profit to business in all relation and criteria.
For mutual growth of organization encircling physical, mental, material and spiritual growth of an individual is necessary within an organization. For optimization of better result oriented growth the ever greening concept is SARVE BHAVANTU SUKHINA, SARVE SANTU NIRAMAYA
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