Assignment 1

Case Study: Corporate Social Responsibility

Student Name:

Submission Date:
Table of Contents
1. Problem definition ...................................................................................................................... 3

2. Background information ............................................................................................................. 3

3. Concerns of key stakeholders ..................................................................................................... 3

4. Strategic/ultimate goal ................................................................................................................ 4

5. Objectives ................................................................................................................................... 4

6. Analysis....................................................................................................................................... 4

7. Alternatives/Action Steps ........................................................................................................... 5

8. Evaluation of Alternatives .......................................................................................................... 5

9. Recommended Action Plan......................................................................................................... 6

References ....................................................................................................................................... 7
1. Problem definition

Re-importation of drugs from Canada fosters various ethical dilemmas as some politicians and
consumer advocacy groups tend to ignore the law for their self-interest while international
agreements and patient safety are on risk due to such practices 1. Focusing towards re-
importation of prescription medications, in which drugs made in the United States, sold &
dispatched to different nations are then sold and sent back to the states, is a developing political
issue. Seniors are going to Canada and different nations to purchase physician recommended
drugs at lower costs and are taking them back to the states. In addition, there are an expected 80
on-line drug store websites in Canada that sell physician endorsed drugs, a significant number of
which are sent to U.S. clients.

2. Background information

The WHO estimates that 10% of the world’s drug supply is counterfeit with majority of it in
countries with less drug monitoring and lighter penalties like Canada. Moreover, U.S. Drug
Enforcement Agency reports that 25% of the imported prescription drugs are counterfeit and
majority of the remaining do not come from FDA-approved sources 2. As per the Center for
Pharmacoeconomic Studies at the University of Texas at Austin, there has been a sensational
increment in import into Canada of prescriptions from all across the globe. From 1999, the
pharmaceutical imports of Canada have expanded by 101.6 percent. The WHO inferred that
around 10 to 20 percent of medications tested in developing nations fall flat the most
fundamental quality tests. With developing technological modernity, fake prescriptions may
regularly look practically indistinguishable to true ones. A lot of lack of concern exists
concerning such fake products as Diesel pants, OP shades or Nike athletic shoes. The equivalent
can't be said in regards with physician recommended prescriptions 7.

3. Concerns of key stakeholders

Consumer advocacy group wants cheaper price and are even willing to do unethical imports of
drugs. Brand name prescription drug manufacturers and pharmacists both in Canada and US
raise concerns of re-importation considering patient safety 3. The mind-boggling expense of
physician endorsed drugs in the US gets media consideration practically day by day. In the past
year, 33% of Americans state that they or a relative has experienced issues paying for
medications. A comparative percentage has not filled a solution or has scaled down a
recommended dose in light of high out-of pocket costs. Accordingly, Americans are swinging to
less expensive sources for their professionally prescribed drugs. Canadian drug stores are a
coherent decision on the grounds that, somewhat because of administrative controls, costs of
most of the commonly utilized medications are significantly lower in Canada.

4. Strategic/ultimate goal

According to utilitarian view of ethics, business actions can be considered as ethically acceptable
if it maximizes the total utility, or which ensures the maximum good for the highest number of
people 4. It is the only good structure that can be utilized to legitimize military power or war. It is
additionally the most well-known way to deal with moral reasoning utilized in business as a
result of the manner by which it represents costs as well as benefit. Further, the action will be
morally correct if in case the net benefits over costs are maximum for all affected. Thus, it is a
very popularly used business decision technique which can be adopted independently for any
ethical conscience.

5. Objectives

To prohibit the gray market of prescription drugs by applying cost-benefit or utilitarian analysis
to key stakeholders of this ethical dilemma, namely government, consumers, and pharmaceutical
companies. In other words, it will deal with the ethical implications of the gray market for
prescription drugs. Further, major emphasis will be done on attempts being made by people and
states for reducing the high costs of domestic prescription drugs through importing or re-
importing of drugs from the nations like China, Canada or Mexico, additionally, the attempts
being made by the government as well as drugs firms for limiting or prohibiting all unethical
practices.

6. Analysis

The cost benefit or utilitarian evaluation is applicable to each of the three major players or
groups in this discussion i.e. the pharmaceutical industry, the government and the consumers.
From the government’s point-of-view, the major cost associated with import of drugs is safety-
risks to the consumer. However, the pharmaceutical companies are mounting a lot of money for
lobbying which is considered a benefit to politicians. Customers have benefit of reduced prices
of drugs but severe cost of counterfeit drugs which may increase health-risks 6. The examination
for the customer would include gauging the cost saving funds against the danger of being
swindled and conceivably murdered or harmed by a phony medication. Indeed, even in wealthier
nations like the U.S. and the United Kingdom, where drugs are tried every now and again, fakes
can sneak past, regularly when patients or clinicians get them over the internet. Studies
demonstrate that around 90% of medications acquired online originate from an unexpected
nation in comparison to what the site claims, and internet drug stores regularly purchase drugs
from nations with remiss administrative frameworks. From the pharmaceutical companies’
standpoint there are only costs without any benefit of re-importing drugs 5. The main genuine
cost avoiding the practices may be the expanded cost related with lobbying endeavours.

7. Alternatives/Action Steps

Complete ban on re-import should be exercised. U.S. and Canadian government may have
mutual understanding to formulate policy to minimize unethical drug import and re-import.
Focusing in relation with the policy for minimizing unethical drug import and re-import, both
U.S. and Canadian government should plan to execute legislation that will allow temporary ban
of bulk exports and imports of unethical drugs. In addition to this, anti-counterfeiting solutions
and online fraud detection methods should be used for identifying the distribution network
system which is responsible for such type of unethical practices.

8. Evaluation of Alternatives

The alternative action will require cooperation of both the government which might not be
feasible at times when both governments have different costs-benefits out of the drug trade. In
order to combat with the gray marketing of drugs, government of both the nations should come
up with anti-counterfeiting solutions as well as online fraud detection methods. Seeking help
from these solutions, the government can determine most of the lost revenue, market share as
well as brand reputation through tightening of value chains. Other than this, all these anti-
counterfeiting software will support the government to track distributor’s network which is
accountable for bringing the authorized product in the gray market.
9. Recommended Action Plan

The high cost of prescription drugs affects the purchasing power of consumers and they tend to
attract towards cheap but unethical means to acquire drugs. Therefore, congressional options for
controlling drug costs such as the use of generics drugs and disease management techniques
should be employed. In the event that the objective is lower costs, a shorter course to arrive is to
proceed with approval process for new and non-exclusive or generic medications and limit
lawsuit abuse, in this way bringing down medication costs. Customers who consider three drug
stores and analyse their costs before purchasing a prescription can regularly spare to such an
extent or more as they would by going on the web, without the dangers. Furthermore, if the
fundamental concern is that customers in different nations aren't "paying a considerable amount,"
at that point the arrangement is to make drug value controls and the infringement of patent rights
themes of exchange dealings, and not expect drug organizations to change government
approaches 8. Moreover, research and development incentives should be provided to the
pharmaceutical companies by the government.
References
1
Desroches, F.J., 2005. The crime that pays: Drug trafficking and organized crime in Canada.
Canadian Scholars’ Press.

2
Augustine, L.M., US Consumer Demand for Foreign Pharmaceuticals The Import of
Unapproved, Illegal Drugs.

3
Campbell, L.A., Clément, D. and Kealey, G.S., 2012. Debating dissent: Canada and the 1960s.
University of Toronto Press.

4
Perot, E., 2014. Maximising Utility: Applying Utilitarian Theory to International Patent
Law. King's Student L. Rev., 5, p.58.

5
Cavaliere, F.J., Mulvaney, T., Swerdlow, M.R., Bandyopadhyay, S. and Natarajan, V., 2017.
Prohibiting Gray Market Prescription Drugs: The Ethical Dimensions. Southern Law
Journal, 27(1), p.91.

6
Donald, L.B. and Steele, J.B., 2004. Why We Pay So Much for Drugs; How the Clamor for
Cheap Canadian Imports is Heating Up the 2004 Campaign and Giving Washington a
Headache. Time Magazine.

7
Choudhry, N.K. and Detsky, A.S., 2005. A Perspective on US Drug Importation. JAMA.

8
Altman, S.H. and Thomas, P.C., 2002. Controlling Spending For Prescription Drugs. NEJM.