PharmaCARE:An Ethical Analysis

August 17, 2014Damien LoweProfessor Andrea BrvenikLEG 500 – Law, Ethics & Corp. Governance

The advancement of medicine has saved many lives. Many

illnesses that were deemed fatal in past years can now be cured

with pills or medicinal injections. Pharmaceutical companies like

PharmaCARE have definitely assisted in prolonging our health and

lives. In fact, PharmaCARE has also done a great job taking care

of the community. The company offers discounted or free medicine

to low income consumers, sponsors healthcare educational

programs, and has recently started a recycling campaign. However,

the company has also participated in dishonorable practices. It

has lobbied against environmental laws and regulations, and runs

a manufacturing facility that is destroying the natural

environment in Colberia, Africa. The people of Colberia that toil

for this facility endure poor work conditions and are paid the

low wage of $1.00 per day. Aspects such as stakeholders and

ethics can be analyzed to fully understand how dangerous

PharmaCARE’s immoral endeavors can truly be.

A simply definition of a stakeholder is any party that has

interest in an organization’s affairs. Similar to most

corporations, PharmaCARE’s stakeholders include employees,

1

investors, and customers. Neil Kokemuller (n.d.) even adds

communities to the list. He supports his notion by pointing out

that “companies operate within communities, and their activities

affect more than just customers.” He adds, “communities also like

to see businesses get involved in events and local charitable

giving.”

It can be said that

a company has reached nirvana if it can successfully fulfill its

mission while keeping its stakeholders happy. There is no

exception when it comes to PharmaCARE. In many cases, however,

this feat is a challenge to accomplish. Often stakeholders’

interest do not align, and choices that are made to please one

group may displease another. For example, a company’s

shareholders are focused on maximizing profit. In order to meet

this demand the company strives to keep operating costs low.

This, in return, could upset employees who do not get the raise

they deserve.

Another example of a company trying to please stakeholders

is PharmaCARE’s lobby efforts to stop the reintroduction of the

superfund tax. This tax would require companies in certain

2

industries to pay fees for worksite contamination. This tax would

increase expenses for PharmCARE and maybe it suppliers. In

return, the company would have less profit and could possibly

have to rise prices to offset the tax. Additionally, “industries

that were subject to the tax complained that they were being

unfairly targeted, since the funds from the tax went to clean up

all kinds of contamination, not just from their chemicals” (Cama,

2014).

Although the reasons behind the decisions to help halt the

Superfund Tax may be logical it does present a flaw in

PharmaCARE’s moral code and could cause the community to think

twice about how genuine the company’s green initiatives are. To

avoid backlash and negative publicity, companies should do their

best to make ethical decisions that satisfy their major

stakeholders.

One way to discover if decisions that affect stakeholders

are the right ones to make, is to determine if they are ethical.

There are many theories of ethics that can assist in this. Below

PharmaCARE’s choice to operate a manufacturing facility in

3

Colberia is examined using these various theories.

Utilitarianism

When abiding by the utilitarianism theory of ethics it is

not enough to just consider the immediate effects of an action.

Instead, when following this theory one must contemplate on all

those effected by the action or decision. Utilitarianism deems a

decision truly ethical if there are no adverse outcomes to any of

the parties involved.

PharmaCARE’s manufacturing facility, as mentioned

previously, allows PharmaCARE to manufacture products while

keeping the associated labor costs extremely low. In addition,

the people of Colberia also eagerly volunteer information that

can result in product development. In return, these inhabitants

and workers receive poor working conditions, intense labor, a

damaged environment, and the destruction of native species. It is

true that the combination of low labor costs and free insight for

new products does serve beneficial for not only PharmaCARE’s

shareholders but also its consumers. Keeping costs low helps the

pharmaceutical company maximize profits and does so in a way that

charges to consumers are kept at reasonable low prices. However,

4

it is obvious that there is not positive results for all those

effected by the choices made in regards to this manufacturing

facility. Therefore, according to the theory of utilitarianism,

this decision is unethical.

Deontology

Unlike utilitarianism, the theory of deontology does not focus on

consequences to determine if an action is ethical. Instead,

deontology solely looks at the moral duty that must be fulfilled.

According to the Encyclopedia Britannica, “deontological ethics

holds that at least some acts are morally obligatory regardless

of their consequences for human welfare” (“Deontological ethics”,

n.d.). Taking this into consideration PharmaCARE’s choice to

manufacture products in Colberia is an ethical one. Despite the

harm the facility does to the area, the Company has a moral duty

to give customers affordable high quality medicine that helps

save lives.

Virtue Ethics

Virtue ethics refers to the belief that teaching and

installing positive character traits into an individual will

result in that individual making moral decisions. If one is

5

taught to be honest and kind then his/her decisions with also

reflect honesty and kindness. PharmaCARE is recognized as a

caring business, and as the Houston Chronicle points out,

“companies with a healthy corporate culture gain a positive

reputation” (Kelchner, n.d.). There is no doubt that this

reputation of care is achieved by having a company culture that

installs this trait throughout the organization. However, when

looking at the company’s conduct in Colberia one can question if

care is present. The aftermath of putting a manufacturing

facility in the country is contrary to PharmaCARE’s reputation,

causing the company to fail the test of virtue ethics.

Ethics of Care

Joan Tronto, an author and political science professor at

the University of Minnesota, is known for her work on the theory

of ethics of care. Her definition of care is “praised for how it

admits to cultural variation and extends care beyond family and

domestic spheres” (Sander-Staudt, n.d). She sums up ethics of

care by using four main categories: attentiveness,

responsibility, competence, and responsiveness.

6

PharmaCARE is inattentive and irresponsible, fore it has not

recognized or taken ownership for the needs of Colberia. The lack

of action taken to better the situation makes the company

incompetent in the eyes of ethics of care. In addition, since

there is no action taken place to provide care, there is no care

receiver. Without a care receiver the category of responsiveness

cannot be explored. It has been made clear that if these four

phases of care are used to measure PharmaCARE, their actions in

Colberia would be found unethical.

Personal Morals

Since it is difficult to separate installed morals, one’s

own ethical compass comes into play when deciding how to proceed

in personal and business manners. We may use methods like the

ones detailed above to determine what classifies as ethical.

Personally, a mixture of virtue ethics and utilitarianism is used

when I make decisions. By using the virtues taught to me and

considering the outcome of all parties involved, I am able to

determine what the ethical choices should be made. Based on this

combination of theories, PharmaCARE’s actions in Colberia are

unethical.

7

After reviewing the different theories of ethics, it is hard

to argue that PharmaCARE should continue business as usual. It is

true that maximizing profits is an important task for a company,

but it is also imperative to make ethical decisions to maintain a

positive image and avoid other associated costs. Chiquita Brands

International, Inc. serves as a good example of how being

unethical can come with a fee. The North Carolina based company

is a produce distributor and the top supplier of bananas in the

United States. The company gets a large quantity of its banana

inventory from Latin American countries such as Costa Rica and

Columbia.

Similar to PharmaCARE, Chiquita’s less than ethical behavior

is displayed abroad. It is actually Columbia where the company

partakes in questionable activity. Worried about the volatile

area where work was being done, Chiquita paid $1.7 million to a

paramilitary terrorist group, the AUC, to protect their

employees. After pleading guilty, the department of justice

ordered Chiquita to pay a fine of $25 million. This, however, is

not the last time the company would pay for this immoral choice.

8

Contrastingly to PharmaCARE, Chiquita has brought its

unethical practices to the states. In last year the company paid

over $780,000 to lobby against the Justice Against Sponsors of

Terrorism Act (JASTA). This act was mainly designed to assist the

victims of 9/11, but Chiquita feared that it could also

negatively affect their business. Tim Mak (2014) underlines that

JASTA “became relevant to Chiquita, with its history of paying

off the terrorists of the AUC” and could bring big trouble to the

banana distributor “by expanding the liability of groups that

have aided and abetted terrorism”. Chiquita’s involvement in

trying to stop the passing of this act is another decision that

has not only cost the company money but also rescinds its

respectability.

It is evident that PharmaCARE must alter it ways to avoid

tarnishing its brand or someday having to pay monetary fines for

its behavior. Many may find it shocking for executives to live in

luxury compounds with high class amenities while workers go back

to huts with no electricity after completing labor intensive

jobs. The working conditions and wages could present human rights

issues for the company in the future. This is why improving the

9

quality of the worker environment in Colberia should be a must

for the company. This can be done in many ways including:

On Site Living Arrangements

This solution entails expanding the compound that executives

use as housing. The compound will include living quarters for the

workers. This will solve the issue of having workers that are not

privileged to electricity and also make up for lower wages.

Improved System for Carrying

PharmaCARE can improve the working conditions in Colberia.

If it possible to reach the areas where plants grow by jeep, this

method should be implemented. Eliminating the five mile walk in

and out of the jungle would greatly improve work conditions.

Another alternative is to use canoes where possible. It is

understood that certain areas of the jungle may be better

accessed on foot. However, the company should develop containers

for gathered plants that makes transporting easier for these

area. Although the amount of plants in one trip may need to be

reduced for proper use, the containers should be lightweight and

designed to be toted easily or worn on the back.

Higher Wages

10

Paying the workers of Colberia the same rates as those in

the United States may not be the most practical choice. The

country has a different cost of living and this should be taken

into consideration when it comes to compensation. This does not

mean in any way that 1.00 a day is acceptable pay. PharmaCARE

must take the time to define a reasonable wage that will not

violate human rights but also keep prices sensible for customers.

PharmaCARE has accomplished its goal of providing superior

medicine to consumers. The company has also done a great job of

giving back to the community thorough scholarships and programs

as well using sustainable packaging. The company must now turn

its efforts to aiding the community of Colberia that it is

progressively destroying. In order to uphold its reputation of

care it must make ethical choices where ever it does business.

11

Works Cited

Cama, T. (2014, July 29). Senate Dems’ bill would bring back Superfund tax.

Retrieved August 17, 2014, from The Hill:

http://thehill.com/policy/energy-environment/213707-senate-

dems-bill-would-bring-back-superfund-tax

Deontological ethics. (n.d.). Retrieved August 12, 2014, from

Encyclopædia Britannica:

http://www.britannica.com/EBchecked/topic/158162/deontologic

al-ethics

Kelchner, L. (n.d.). Importance of a Healthy Corporate Culture. Retrieved

August 14, 2014, from Houston Chronicle:

http://smallbusiness.chron.com/importance-healthy-corporate-

culture-20899.html

12

Kokemuller, N. (n.d.). Who are the External Stakeholders of a Company?

Retrieved August 16, 2014, from Houston Chronicle:

http://smallbusiness.chron.com/external-stakeholders-

company-64041.html

Mak, T. (2014, June 3). Exclusive: Chiquita Is Blocking a 9/11 Victims’ Bill.

Retrieved August 16, 2014, from The Daily Beast:

http://www.thedailybeast.com/articles/2014/06/03/exclusive-

chiquita-is-blocking-a-9-11-victims-bill.html

Sander-Staudt, M. (n.d.). Care Ethics. Retrieved August 16, 2014,

from The Internet Encyclopedia of Philosophy:

http://www.iep.utm.edu/care-eth/#SSH1cv

13