Iron Throne Pharmaceuticals: Case Study ( Subject: Economics, Business )

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SECTION 1
Iron Throne Pharmaceuticals

You are S. Baratheon, an executive at The Iron Throne of Pharmaceuticals (ITP), the leading Canadian pharmaceutical company.  You are tasked with determining the future direction of the company, as ITP is trying to situate itself for future profit generation in the highly competitive pharmaceutical industry.  ITP is a pioneering force in the pharmaceutical industry, building its empire on anaesthetics, and has more recently become a significant researcher and innovator in heart disease medication and therapeutic vaccinations.  You are to write a brief to help guide the board’s decision on the extent that, all things considered, ITP should pursue expanded distribution of specific pharmaceuticals to markets that have been adversely affected by shortages, and expand their partnerships with governments in the developing world.    

Iron Throne Pharmaceuticals: The Good:

ITP is Canada’s leading producer of pharmaceutical drugs and dominates the anaesthetics/barbiturates market.  Anesthetics are drugs generally administered to facilitate surgery, and when administered, lead to complete or partial loss of feeling.  Anesthetics are categorized into two classes: general and local.  General anesthetics cause a reversible loss of consciousness, while local anesthetics cause a loss of sensation for a limited region of the body while maintaining consciousness.  ITP revolutionized anesthetics; before ITP came along, it was not uncommon for patients to require painful combination of 4-7 intravenous drugs administered in rapid succession to induce a loss of consciousness.  ITP’s industry leading innovation reduced the number of shots patients required in both general and local anesthesia, and in the most minor cases, have produced topical anesthesia that eliminates the need for shots altogether.  Moreover, ITP was also the first company to produce gas based anesthetics, giving those patients that fear needles a secondary option.  It is for these reasons that 41% of surgeries that occurred in Canada that required general anesthesia used ITP produced anesthetics, while 43% of patients requiring local anesthesia received an ITP product, in the last 10 years.  What was before a painful set of needles before painful surgery to remove, say, a gallbladder, has been replaced by patients who wake up after surgery, not realizing that they had had surgery at all. 

While anesthetics are a highly lucrative marketplace to dominate, ITP has more recently been hailed for their advances in heart disease research.  Heart disease and stroke are the leading cause of deaths in Canada, with 29% of deaths in Canada in 2015 attributed to heart disease.  In conjunction with stakeholders from around the world, ITP has been making important strides in the efficacy of ACE Inhibitors (medication that widens arteries to lower blood pressure and make it easier for the heart to pump blood) and Aldosterone Inhibitors (potassium-sparing diuretics that can be prescribed to reduce the swelling and water build-up caused by heart failure), and have targeted cholesterol medication, and vaccine efficacy, in their next phase of development. 

Iron Throne Pharmaceuticals: Economic Implications:

ITP is a Canadian success story, and is one of the country’s principal employers.  ITP has multiple production sites in every Canadian province and Territory.  In their factories alone, ITP employs over 105,000 Canadians.   

ITP gives priority to hiring local employees when building and staffing production sites, and contributes directly to improving the fortunes of otherwise marginalized Canadian communities.  ITP touts the fact that the company gives priority to building production sites in remote Northern communities that are otherwise marked by isolation, and deprivation.  In these Northern communities, before ITP builds their production sites, they make significant contributions to the region’s infrastructure, and routinely built schools, roadways, hospitals, research centres, and in a few examples, Universities.  ITP holds that “a strong surrounding community is in The Iron Throne’s best interest.”[1]  

ITP creates jobs at a consistent rate, and holds it as its “social responsibility that [they] train and hire employees from local and neighbouring communities, and compensate them at a rate that allows us to recruit and retain the best talent in the industry.”^[2]  In one of their many sterling examples, in February of 2014, ITP was given the keys to Fort Blackfish, in recognition of the progress the community has made since ITP first built a production site, and hired 63% of its workforce from the surrounding Aboriginal communities.  Before ITP’s arrival in the early 60’s, Fort Blackfish had Canada’s highest unemployment rate, lowest literacy rate, had one dilapidated building that was both the school and hospital, and no running water.  Now, Fort Blackfish is considered a major metropolis, with the world’s first Pharmaceutical Institute of Technology (PIT) that specializes in cutting edge research that is not found anywhere else in the world.           

ITP’s production sites produce all of their industry leading anesthetics, barbiturates, and pharmaceutical drugs.  ITP commonly refers to its larger production sites as campuses, and each campus has both a lavish production site, and areas designated specifically for ITP’s industry leading pharmacological innovation and R&D, vaccination research, and clinical trial oversight.  It is from here that ITP shapes and guides the international pharmaceutical and vaccination marketplace.  In fact, ITP is recognized as the most important international player in globalized pharmaceuticals, and was the first non-European pharmaceutical company to be included in the EU’s Commission on Pharmaceutical Trade (EUCPT), an opportunity that enables ITP to both shape, and enter, heretofore unavailable European markets.

  

ITP is the single biggest employer of scientist and pharmacological engineers in North America, and 25% of ITP’s overall workforce is geared towards pharmacological R&D.  Because pharmacological research and innovation requires highly training, technically skilled, and specialized employees, ITP has become the foremost leader in training, and producing, some of the world’s most sought after employees, with additional Ph.Ds. required to maintain employment at ITP.  ITP employs thousands of immunologists and research scientists who work in laboratories and oversee clinical trials geared towards improving the efficacy of their vaccines, and developing new treatments for patients with immune disorders.  ITP also employs thousands of people on their production lines, and has a worldwide distribution network for their drugs. 

The Iron Throne’s Political Clout:

The Canadian government has partnered with ITP on many successful research ventures that have increased Canada’s pharmacological profile internationally.  Over the last 50 years, the Canadian government, interested in ways to solidify its economic base, allowed for modest subsidies and tax breaks to incentivize ITP to maintain its base of headquarters in Canada.  With each passing decade, as ITP came to dominate the international pharmaceutical market, the Canadian government continued to provide incentives, and concessions, for ITP to remain based in Canada, while being competitive in the international marketplace.  This partnership with the Canadian government has undoubtedly aided ITP’s ascension to being one of the biggest international players in the pharmaceutical industry, and a leader in pharmacological research; ITP has access to government resources, facilities, and researchers, and is able to make use of the collaborative possibilities that are a result of Canada’s place within the larger international pharmacological network.  The Canadian government has provided ITP with more privileges[3] (grants, and funding) than any other corporation, and ITP undoubtedly relies on the Federal government to help offset some of their costs as they pursue further research opportunities.

Several years ago, ITP moved its patent office offshore to Manrocovia, Prusskov.  This move did not garner much attention at the time, and continues to receive little media attention.  At the time, it was reported that the move was reflective of ITP’s status as a Multi-National Corporation.  Shortly thereafter, ITP began operating under Prusskov’s pharmaceutical regulations.  In fact, the move was a result of the Canadian government’s refusal to support ITP’s request to protect some of their most profitable patents.[4]  One of the benefits of moving to Prusskov, is that ITP has essentially been able to re-write Prusskov’s pharmacological policy.[5]   For example, while ITP’s export facilities remain in Canada, the company’s Prusskov patent office handles all of their export oversight.  Before moving to Prusskov, ITP lobbied their government to ensure that they would have complete control, and oversight, over reporting of their exports, and lobbied the government to repeal all laws pertaining to transparency in reporting pharmaceutical exports; because of the significant investment and employment that ITP was bringing to Prusskov, and the fact that ITP would singlehandedly improve the economic fortunes of the country, the Prusskovian government quickly capitulated.       

ITP used its powerful international position to champion the European Commission’s (EC) decision to imposed tough new restrictions on the export of anaesthetics used to execute people in the US.  The EC, along with Canada, the UN, and 164 other countries, agree that products that may be used for capital punishment ought to be tightly controlled on the grounds that “capital punishment is cruel, inhumane, and/or degrading treatment of punishment.”[6]  There are 34 states in the US that still practice the death penalty, and critics believe that capital punishment is amongst the worst human rights violations, and point to several instances in the US were prisoners, later exonerated through DNA, were executed for crimes that they did not commit.  Critics also seize on the readily apparent social, economic, and racial bias of the application of capital punishment.[7]  Moreover, in the US, capital punishment also does not serve as the deterrent that it is touted as, and its use for retribution calls into question whether or not revenge is to be viewed as socially acceptable.  In other parts of the world, the vast majority of governments that utilize capital punishment are illiberal governments, run by dictatorships, and often done so for draconian purposes, political purposes, and sometimes altogether for objectionable reasons.[8] 

Worldwide opposition to the death penalty led to the EC adding 8 barbiturates to the list of banned anesthetics for export (including the three drugs that used in succession for almost all US executions: sodium thiopental used to induce unconsciousness, pancuronium bromide to cause muscle paralysis and respiratory arrest, and potassium chloride to stop the heart), which has caused a worldwide shortage.  The move follows many other European countries that unilaterally banned the export of these drugs, based on moral opposition to the death penalty, and desires to abolish the death penalty worldwide.  In recent months, this had led to botched executions in the US, as states have been employing unproven and otherwise untested combinations of drugs to put prisoners to death, in absence of the highly effective barbiturates that had previously been available.  Since January 1^st, 2014, there have been at least 3 cases were prisoners, strapped down in the death chamber, thrashed about, gasping for breath, kicking their feet, and mumbling incoherently, as an otherwise routine procedure has been replaced with unexpected results when states employ untested measures for capital punishment.  Sympathy for prisoners is lacking however, as those who support the death penalty oftentimes reap macabre satisfaction from prisoners suffering before death.

It would be naive to think that banning the export of barbiturates used for capital punishment will lead to the abolition of the death penalty entirely, as some US states have proposed bringing back the electric chair (a far more cruel application of the death penalty), firing squads, and simple beheadings, but pharmaceutical companies around the world unite under the premise that their drugs are to be used to help people, and not kill people.  The US penal system has had to turn to international imports of barbiturates for capital punishment, as the only American manufacturer of sodium thiopental, the Illinois-based Hospira, suspended production because it was suffering commercially as a result of having its drug connected to executions.  Last summer, a Danish manufacturer of pentobarbital, Lundbeck, blocked the sale of its product trademarked Nembutal to any penal institution in the US.  Doctors from around the world have threatened to boycott pharmaceutical manufacturers that supply drugs for executions, arguing "no responsible pharmaceutical company should have anything to do with executions."[9]  ITP was one of the first Canadian pharmaceutical companies to agree to the EC ban, and lobbied the Canadian government to impose these restrictions on Canadian companies.  ITP’s CEO, D. Targaryen, pledged that “the Iron Throne is guided by ethics, and does not endorse … the execution of … prisoners”[10] and has made that point central to the company’s code of ethics.  

The Iron Throne’s Philanthropy:

ITP is one of the foremost philanthropic companies in North America.  ITP has made several high profile donations to establish itself as one of North America’s most admired companies.  After the release of the Conference Board of Canada’s 2005 report that identified heart disease and stroke costing the Canadian economy more than 20.9 billion dollars every year in physician services, hospital costs, lost wages and decreased productivity, ITP donated $250 million dollars to heart disease research in Canada, and began research into advances into the pharmacological approach to fighting heart disease in Canada. ITP’s funding of heart disease has led to significant advances in research relating to heart disease, and the non-invasive procedure for clearing blocked arteries in heart patients was in large part due to research funded by ITP.  ITP’s public position is that “they owe it to society, and our global community, to benefit others in ways greater than merely increases in jobs, or GDP.”^[11] 

ITP has recently targeted vaccines as an important opportunity for research and development; in the last 5 years, ITP has partnered with UNICEF to work towards eradicating childhood illnesses around the world through worldwide vaccination programs, and donated over 45 million doses of its polio, tuberculosis, and meningitis vaccines worldwide.  ITP is slowly working its way towards becoming the worldwide leader in vaccination programs; ITP’s vaccine programs are found all over the world, but have made the most progress in eradicating infectious diseases, and preventable infections, throughout the developing world.  In some cases, ITP is giving individuals in the developing world access to new therapeutic vaccines and improving vaccine efficacy.[12]  Much of ITP’s progress relies on clinical trials, and ITP continues to donate the significant amounts of money that is necessary to build and support the healthcare infrastructure throughout the developing world that clinical trials rely upon.  In truth, much of the progress that ITP made in improving the efficacy of their ACE Inhibitors and Aldosterone Inhibitors was largely due to the company’s clinical trials throughout Sub-Saharan Africa.

As criticism began to build regarding ITP’s stance regarding their patents to HIV/AIDS drugs, ITP effectively shifted the conversation, when they made a sudden investment of hundreds of millions of dollars building the health infrastructure (hospitals, clinics, medical laboratories, doctor’s offices, schools, medical schools, medical training facilities, etc.) that we in the developing world take for granted, thereby greatly improving access to healthcare resources across the developing world. 

All told, ITP, since 1988, has not donated less than $100 million dollars a year to its various social initiatives. 

The Iron Throne: The Bad:

Speaking off the record (for fear of reprisal from ITP), doctors, industry insiders, government officials, and NGOs have all condemned ITP’s approach to patents for HIV/AIDS drugs.  These stakeholders claim that ITP’s conduct alone has stalled progress towards treating the world’s 30 million HIV/AIDS patients.  ITP’s position is that by maintaining these patents, they are able to fund their industry leading R&D, and point to the progress they made in the last 5 years in advances in heart disease medication as evidence to support their claims.  Industry insiders, however, argue that ITP is simply trying to leverage their position of power over the World Health Organization (WHO), and are essentially waiting the WHO out until they are willing to recognize ITP internationally, and allow for ITP board members to serve on the WHO’s executive council.  Once there, ITP would then begin to pursue their corporate interests on an international scale, and would insist, for example, that their flu vaccine become the international standard.  What’s most troubling is that, if ITP were to allow for generic versions of many of their drugs, they would undoubtedly still be the one of the world’s most valuable pharmaceutical companies, with profits continuing to swell into the billions.  

Secondly, there are unconfirmed reports that connect ITP to exports of banned barbiturates worldwide.  The first reports that connected ITP to exports of banned barbiturates were met with legal action on the part of ITP, they successfully sued the news outlet, and their reporters, for libel even though they were simply investigating these claims, and had not actually published any of their reports.  In the second instance, in the days leading up to the Pharmaceutical Watchdog Organization (PWOrg.) publishing an exploratory piece on the direct connection between ITP exports, and the increase of the use of barbiturates in worldwide executions, the Canadian government allowed ITP to install their own researchers, and “guide the direction of this reporting and research” (under the auspices of their agreed upon settlement that ITP is best served to be their own industry watchdogs).  This report was never released, and the Organization’s facilities were shuttered, with the CEO and board members of PWOrg all becoming high ranking officials at ITP at nearly double their previous salaries.  When the investigative news series, The Fifth Estate, was poised to release an explosive documentary on ITP’s connection to Prusskov’s changing pharmacological policy, and the increasing number of barbiturates used for capital punishment worldwide (which does not make sense, given that the vast majority of pharmaceutical companies no longer export barbiturates for executions, but the number of executions with imported barbiturates continues to increase), ITP’s executive board was able to prevent the release of this documentary, as they claimed it violated ITP’s legally protected proprietary data, and instead choose to release a documentary, produced in conjunction with the PIT, that made little mention of barbiturates, and when it did do so, only in conjunction with animal husbandry, a move that baffled industry insiders.

While the true details of the PWOrg’s report, and the Fifth Estate documentary were never released, there are individuals throughout ITP who marvel at the extent that ITP controls any and all information pertaining to their business.  In the US, in the last 4 months alone, several states have begun again to put prisoners to death after gaining newfound access to the banned barbiturates.  The judicial process behind US Capital punishment, is shrouded by intense secrecy, and a lack of standard protocol, but backed by the US Supreme Court.  States that employ the death penalty are legally protected from disclosing the drugs they use in the executions, and the companies that provide these drugs.  While ITP steadfastly denies that they have exported any drugs from Canada to the US for executions, they have not ever acknowledged or accounted for the increasing amounts of exports that they are sending from their Prusskov offices to US states, and other countries, that allow for the death penalty.[13]  Countries that have signed on to the EC’s ban on exporting drugs for execution allow inspectors on their premises each day, and keep strict logs of their drug exports (though these are not released to the public), as pharmaceutical companies do not have to disclose where or what they are exporting from certain facilities, but those who agree with the ban have agreed to this concession.  Prusskov, though, which has not signed on to the ban, does not track what pharmaceuticals a company exports, or to where they export to, or for what purposes the exported drugs are to be used.  Employees, speaking amongst themselves, noted Targaryen’s carefully crafted news release regarding the export of banned drugs, and noted that ITP does not export any drugs that contravene Canadian law, nor do they contravene “the law in any country they operate.”[14]    

ITP is also looking to insulate themselves from any connections they may have to the export arm of the Prusskov office, referencing the fact that Prusskovian law (laws written by ITP lawyers) makes it illegal to disclose the country’s exports.  In a secret shareholder’s meeting, Targaryen argued that “a company that could export banned drugs to the US and worldwide would reap substantial profits, furthermore, if that same company were to pressure the Canadian government to prohibit all other companies located on Canadian soil from exporting these same drugs, and pressure the UN to extend this ban worldwide, a very select few companies could take advantage of loopholes in the system, and have little or no competition.”[15]  Before signing onto the EC ban, ITP had not taken a position regarding capital punishment, but had insisted that it is up to each individual government to put in place the legal system of their choosing, with its requisite punishments.  ITP does not believe that it should dictate how their products are used, in fact, Targaryen points to the fact that patients undergoing unnecessary cosmetic surgery are anesthetized using ITP products, and would think it inappropriate to pass judgment on the use of their products in that setting, and therefore in any setting.  Targaryen’s position is that “it is the sale of any and all of our products that allows us to continue on with our R&D, and make advances that will benefit mankind.”^[16] 

Additionally, ITP has come under serious scrutiny for some of their methods during clinical trials for therapeutic drugs.  In some regions of the developing world (areas that Targaryen claims “need our help the most”), critics claim that, in several instances, ITP has conducted clinical trials with risky and experimental drugs, and sometimes without fully informed consent from patients.[17]  In one such case in Kinrovia, patients who had signed up for a 6 week trial for one type of ACE Inhibitor were instead given an otherwise untested experimental drug, when it was discovered that these participants had been misdiagnosed as simply having moderately high blood pressure, when they in fact had dangerously high blood pressure.  These experimental drugs were an overwhelming success, and after many more years of trials, became ITP’s bestselling, and most effective, ACE Inhibitors worldwide.  Critics of ITP claim this as evidence of human rights concerns, but they cannot deny the positive impact these trials have in improving the health of individuals throughout the developing world and developed world.[18]  Critics also argue that ITP’s clinical trials in the developing world exploit impoverished individuals, who are willing to sell themselves as human test patients, for drugs that will be sold throughout the western world.  Again, while these criticisms may be valid, critics cannot also deny the incremental health benefits that ITP’s research contributes to the developing world, benefits that are then extrapolated into the international realm.  In most cases, criticisms of ITP’s clinical trials are rejected outright by ITP, as the company claims no wrongdoing[19] and in the most extreme cases, ITP disputes that trails were ever conducted in the first place.[20] 

Lastly, there is also serious concern industry wide about the amount of airborne particulates that employees are exposed to during the production, handling, and packaging process of several types of ITP barbiturates.  Particulates are the deadliest form of air pollution, as they penetrate deep into the lungs and bloodstreams unfiltered, causing permanent DNA mutations, heart attacks, and premature death.  The scientists who are researching Agsepherine-D (AS-D), a specific type of particulate released during barbiturate production, are ITP employees, and have signed confidentiality waivers that preclude them from even discussing their findings amongst themselves.  Their most recent findings establish a connection between aggressive lung abnormalities, and long term workplace exposure to ITP barbiturates during production, handling, and packaging of the product.  ITP, however, has hired all of the leading environmental scientists in the field; most environmental advisory boards have not yet even identified AS-D as a distinct particulate (that ITP owns the patent for[21], and wields ultimate control over), as AS-D is a only recently discovered (by ITP scientists) as a potential cancer causing agent.  For these reasons it may well be decades before AS-D is even identified as a concern requiring further investigation, and that will depend on whether ITP’s executive board believes it is in the company’s interest.  In that timeframe, ITP expects to continue to generate billions of dollars of profit.  Unreleased documents detail that CEO Targaryen became concerned when she heard of this development, and commissioned secretive health and safety inspections.  While the results are not widely known, ITP has significantly improved the ventilation systems in 68% of their production plants, but this option comes at heavy costs.  As their own industry watchdogs, ITP can underreport incidences health related worker absenteeism, while providing these employees with generous sick leave packages and access to North America’s best healthcare benefits program.  ITP also benefits from the fact that most of their Aboriginal employees shun traditional Western medicine, and therefore rates of illness will be artificially lower, as these employees will not seek Western treatment.  

The Iron Throne and Prusskov:

In the years since ITP moved their patent offices to Prusskov, the country’s economy has been revitalized.  The patent offices in Prusskov have expanded slightly to enable packaging and distribution of not only barbiturates, but some of the pharmaceutical drugs necessary in any developing nation.  The region surrounding the Prusskov patent office has become the country’s economic epicentre, and there has been a mass influx of migration to the area, with individuals finding gainful employment in the industry that has sprung up to cater to the unique needs of ITP’s patent offices, and the country’s first pharmacological distribution centre.  ITP’s entrance into the country sparked public interest in not only patents, but pharmaceutical drugs, and pharmaceutical policy.  Prusskov’s government, and citizens, have become aware of the positive impact that pharmaceutical drugs, and healthcare investment can have in a region, and the country has now begun the early stages of building the health infrastructure that can support/fulfil the needs of its people.      

ITP’s investment in Prusskov has resulted in substantial economic gains for the region. Prusskovian government officials have recently requested that ITP not only continue to house their patent offices in the country, but have requested that ITP consider shifting some (if not all) production of barbiturates to Prusskov.  Prusskovian officials argue that shifting barbiturate production to the country will enable ITP to significantly decrease the production costs of their pharmaceutical drugs[22], and streamline the production and distribution process to one location.  To entice ITP to better consider the option, Prusskov has pledged to allow ITP to further re-write the country’s labour code, pharmacological policy, and environmental standards, to suit their interests.  Furthermore, Prusskov, well aware of the importance of vaccines and clinical trials, has offered to create laws that require citizens to participate in clinical trials when called upon, thereby giving ITP access to millions of people, in various states of health, when testing vaccines, and conducting clinical trials, and removing all of the legal and moral challenges associated with informed consent, and clinical trials with experimental medicine.  . 

With these requests, Prusskov is well aware that shifting clinical trials, vaccine research, and barbiturate production to their shores would also require that ITP make significant investments in the country’s infrastructure, and most importantly, make a significant investment of human capital in the region, which in turn would benefit the country in perpetuity.  The hope is that the employment that ITP production sites would bring would have an immediate positive impact on Prusskov’s GDP, while the clinicians, researchers, and immunologists who settle in the country to conduct research and clinical trials would lay the foundation for Prusskov’s health infrastructure for generations to come, with the health centres and laboratories that will need to be built serving as the pillars of their health infrastructure. 

The Dilemma:

To put it bluntly, what should you advise your board to do? You can advise ITP’s board to continue to produce banned barbiturates and utilize Prusskov as a base for exporting these drugs and maintain production of barbiturates as is, while seeking to expand more of ITP’s pharmaceutical production into Prusskov (and away from the glare of critics), along with production, packaging, and distribution of ITP products.  Expanding ITP production into Prusskov would enable ITP to shift the production of banned barbiturates from Canadian soil, and give ITP access to cheaper labour, and give the company the ability to conduct research, and clinical trials, utilizing their experimental drugs, on citizens without concerns about informed consent, and produce their barbiturates without concerns about the impact of AS-D on their Canadian workforce.[23]  This option allows market forces to continue to set the demand for barbiturates, and will allow ITP to maintain their industry dominance, and continue to gain financially from the worldwide sale of barbiturates, but insulate the company from any criticism, as Prusskovian operations lack transparency and will be kept at a reasonable distance.  Moreover, this distance would allow ITP to take a stronger position against the international sale of barbiturates, and advocate severe restrictions on the sale of barbiturates.  These severe restrictions would make it much more difficult for their competition to sell barbiturates, while ITP would continue to do so from their Prusskov offices, and away from international scrutiny, with most, if not all, of their competition facing consistent restrictions.  ITP can then publically shifts its focus to cancer vaccines, and producing drugs that improve life, while continuing to reap substantial economic returns from the sale of their barbiturates, all the while condemning these drugs and companies who sell them and making it much more difficult for them to do so.  Or, you can advise the board to operate as advertised, and oppose the export of drugs used for executions, rid the company of this aspect of its operations, and gradually turn ITP’s attention solely towards drugs that save/improve lives, and leading the way forward in therapeutic vaccines and clinical trials.      

Stepping back from barbiturate production/exporting, and actively trying to curtail worldwide executions would entail acknowledging ITP’s previous contribution to executions, with the reasonable expectation that ITP would relinquish their industry wide control over pharmacological drugs and policy to make positive contributions towards enacting effective restrictions on the sale and distribution of these drugs.  Acknowledging that ITP continued to sell barbiturates while publically claiming otherwise may lead to a slight loss of consumer trust in the marketplace and a slight loss of marketshare (marketshare that your competition will very quickly snap up, companies that rely on amoral management and show no interest in CSR, opposing the death penalty, or informed consent in drug trials).  Regardless of your choice, ITP will maintain itself as an international leader in pharmaceutical drugs.  The only difference is whether the company will continue to sell drugs that the marketplace demands[24] through Prusskov, while publically focusing on drugs that improve/save lives or abandon this practice altogether, to focus solely on drugs that improve/save lives.     

It must be duly noted that relinquishing industry wide control over the pharmaceutical industry may result in stakeholders becoming aware of AS-D.  Opening up ITP to third party oversight may not actually aid in identifying, and addressing AS-D, as ITP already employs the world’s leading health scientists and researchers and the company is already committed to providing healthier workplaces.  Maintaining control, and resisting oversight, of ITP’s pharmacological research has the further benefit of allowing the company to maintain its reputation as an industry leader, and reaping the good PR that would come with that.  This would also enable the company to continue making important strides in improving health in the developing world.  In truth, acknowledging ITP’s role heretofore in executions would not imperil ITP’s position as the dominant force in pharmaceuticals, but will lead to a decrease in sales.  Any loss in sales will harms the company’s bottom line, harm the company’s shareholders, limit the amount of funding that ITP has for their industry leading R&D, and will force ITP to significantly reduce their philanthropic endeavours. 

Lastly, it must be noted that representatives at the Prusskovian office have also recently been informed that government officials have been inquiring about setting up a distribution scheme for banned barbiturates worldwide, as there are many counties who are not adverse to the death penalty and are willing to enter into negotiations with ITP regarding the use of Prusskov as headquarters for international distribution.  It must be further noted that all of these countries are going to continue to execute prisoners regardless, and the use of barbiturates allows it to be done in a much more humane fashion.  Moreover, there are whispers that other pharmaceutical companies are currently setting up schemes in less developed countries, similar to ITP in Prusskov, which will lead to more competition in the international export of barbiturates, and if ITP decides to stop producing barbiturates, their competition will most certainly step in.  Truth be told, worldwide executions will not stop, and companies will continue to find ways to take advantage of the economic windfall that comes with exporting these drugs.    

Instructions for completing assignment (important, please read carefully):

In no more than a total of 1,875 words (please indicate your total word count at the end of the analysis. Assignments that do not indicate the word count will not be graded.) analyze the following ethical issue: Which position should you defend to the board, supporting the expanded sale of barbiturates that have been marked by shortages, or shifting away from a product that others will then provide in your absence?  To answer this question, students should do the following: (please provide a brief introduction, that states the issue, and your position approx. 75 words).

1.      Apply any six of the seven moral standards (i.e. utilitarianism, moral rights, the principle of justice, principle of care, virtue ethics, Kantianism, egoism), to the full extent that they are applicable, to both support and critique your position on the ethical issue (clearly state your position and clearly indicate which moral standards you are applying) (approx. 1,200 words);

2.      Indicate whether Milton Friedman would agree or disagree with your position on the issue and why, based on his criteria and constraints (approx. 200 words); and

3.      Make reference to any other relevant cases and/or theoretical concepts discussed in the course to support and/or critique your position (approx. 400 words).

No additional research beyond the course materials is required.  Include any reasonable factual assumptions you are making if necessary.  Note that you won’t be graded on the specific alternative you defend but on the quality of your analysis and your demonstration of your grasp of the course concepts and cases. This assignment is to be completed by you alone.  You may not discuss, ask, or allow another student or anyone else to read, review, or give any comments on your answer (or even an outline of your answer), and you may not discuss, review, or give comments on any other student's answer or outline.  Failure to observe the requirement to write your assignment alone will be considered a serious ethical violation, so please be careful to avoid problems.  Please do not ask if you can go over the word limit (the total maximum of 1,875 words) as I will reply that you should not go over the word limit (in fairness to other students).

Instructions for submitting assignment (important, please read carefully):

•         The final assignment must be submitted in to Atkinson Room 282 December 13^th, 12:00 noon.

•         Please clearly indicate your name, the date, the course number, and the instructors name on the cover page of your assignment.

•         Please note that there is an automatic grade deduction of 5% for each day (24 hrs) late for any reason (i.e., including health-related reasons, so please do not wait until the last few days to complete the assignment). This policy will be strictly enforced, so if you ask for an extension, the response will be that you can submit the assignment late but you will receive the 5% per day grade deduction. 

•         Good luck on the assignment!

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[1] Knight, O. ITP – Our Story. Shamonda Press. 1985. P. 23.

[2] Ibid. 25. 

[3] One such privilege that remains highly controversial today was the Canadian government’s 2006 decision to allow ITP to become their own industry watchdogs.  ITP lobbied the government to control all federal pharmacological and vaccination research on the grounds that “ITP had the most expertise, and vested interest, in guiding the issues surrounding the use and production of pharmaceuticals, and vaccines, worldwide.” The Canadian government, concerned with maintaining its mutually beneficial relationship with ITP, agreed to this request (Ayodele, R. (2006) ITP wants to be become their own watchdogs. Globe and Mail. April 27^th, C8).

[4] ITP has steadfastly denied attempts to allow for generic versions of their anti-retrovirals (ARVs) that are highly effective and used in cocktails to treat HIV/AIDS patients, drugs that suppress the virus, and help bolster the patient’s immune system.  Traditionally, patented drugs enjoy 20 years of protection under proprietary law; the reasoning behind this rule is to allow companies to recoup the cost of funding that particular drug, and further invest in R&D.  Canada is a signatory on the International Patents Pact (IPP), and forces companies that have their patent offices on Canadian soil to agree to allow for generic versions of their drugs be made available within, at maximum, 20 years.  By moving its patent office to Prusskov, which is not a signatory on the IPP, ITP does not have to allow for generic versions of their drugs to be made available within 50 years. 

[5] The clearest example being Prusskov’s decision to allow ITP to re-write their pharmacological policy, and expand patent protection to 50 years

[6] European Commission. Capital Punushment is Immoral. Lannister Press. 2003. P. 3. 

[7] In the US, capital punishment is used more often against perpetrators from racial and ethnic minorities and from lower socioeconomic backgrounds, than against those criminals who come from a privileged background; the background of the victim also influences the outcome of the case, as crimes perpetrated against more privileged members of society are punished more severely.  Researchers have also shown that individuals are more likely to support capital punishment when it is applied to individuals from other racial and social classes. (Amnesty International, Arguments against Capital Punishment. O.Martell Press. 2001).  

[8] In Xeershoaja, for example, citizens can be sentenced to death for first time non-violent drug offences, adultery, apostasy, and for expressing what the government terms ‘dissident views.’  

[9] http://www.theguardian.com/world/2012/jan/06/us-executions-death-penalty-drugs

[10] ITP Press Release. August 2008.  

[11] ITP Press Release “Ethics, and our company credo.”

[12] ITP’s vaccine research is currently focused on cancer vaccines.  Any advancements in acquired immunity to particular cancers would be a landmark in human history, similar to the landmark achievements that ITP has made in fighting heart disease and stroke. 

[13] Over the last 12 months, ITP shipments to Prusskov have consistently doubled from month to month.  Countries that are on the receiving end of shipments from Prusskov have also, during the same time frame, began executing prisoners with barbiturates. 

[14] ITP Press Release. October, 2008.

[15] ITP Internal Memo, March 2012.  Those that received this memo took this as confirmation of ITP’s direction.

[16] ITP Press Release, October, 2008.

[17] Although, many individuals from impoverished nations, who are suffering from ill health, readily admit that they would welcome the opportunity to take risky drugs, if that meant giving them a chance (however small) at a healthier future.  In Kinrovia, where chronic diarrhea kills 1 in 7 children, thousands of parents signup for the riskiest conceivable drug trials (drug trials that only have 50 slots for children) if it means having access to drugs that may (or may not) help their children.  In fact, many in impoverished countries, “citizens openly mock the Western notion of informed consent.”  UN Risky Drug Trials Report, 2015.   

[18] While that Kinrovia example had positive results, critics cite 7 other examples throughout the developing world where ITP clinical trials (trials that have never been confirmed or reported by ITP) lacked transparency and UN oversight.  In another Kinrovia trial for a flu vaccine, the parents of 16 children who died claimed that ITP did not properly disclose the risks of the trial.  This led to threats of a lawsuit from Kinrovia’s government over informed consent, but within 10 days, Kinrovia’s government withdrew their criticisms of ITP, and pointed to a 10 million dollar ‘donation’ of 2 hospitals (to be built and fully staffed) in the region as evidence of ITP’s ‘good intentions’ in Kinrovia. 

[19] On several occasions, ITP has made demonstrably false, and factually incorrect, claims about its clinical trials, sometimes disputing the established medical codes of ethics for conducting experiments and clinical trials that govern the industry.  On two separate occasions, ITP has had to replace every member on their Clinician Advisory Board, when every current member quit in opposition to ITP’s practices.  

[20] In the weeks after the death of 16 children in Kinrovia, and other cases where children suffer brain damage in clinical trials, ITP first claimed to be unaware of any clinical trials in the area, identified the families of the victims, provided these families with generous “participation packages” that surpassed 3 million dollars each, and offered to support their claims for permanent refugee status in Canada (but only if they chose to “not pursue this any further, retract any negative statement made about ITP, and cease and desist any future mention of clinical trials in conjunction with ITP”).  The moment a family accepts these benefits (which they always do), ITP begins systematically destroying any evidence of clinical trials in the area, and then proceeds to question the veracity of the reports in the first place (reports that, by then, lack evidence, identifiable victims, and cooperation from families). The most egregious example may have been when it was reported that a child in West Africa was intentionally given a lower than advertised dose of ITP’s flu vaccine (to study the effects of lower doses on children).  When the child died days later, all evidence and documentation of this clinical trial disappeared, the family resettled to one of the wealthiest districts in West Africa, and 2 senior family members assumed highly lucrative consulting positions at ITP.  Although there is no evidence to corroborate the West African flu vaccine trials, industry insiders acknowledge that, although highly controversial and fraught with legal perils, lower dosage trials are fundamentally important for improving the efficacy of drugs and vaccines for billions of people worldwide, and the death of this one child will save many more lives.       

[21] Because ITP owns the patent for AS-D, the company can withhold any and all information pertaining to AS-D, as it is largely considered proprietary data.  Any research pertaining to AS-D will therefore be under ITP’s control and direction.

[22] Prusskov’s labour costs are SIGNIFICANTLY lower than Canada’s.  Roughly converted, the equivalent of $17 Can per day would put a Prusskovian employee in the third highest income earning bracket in the country.  

[23] ITP officials are readying a PIT produced documentary that rejects the connection between particulates and lung cancers (even though the UN, and every major health organization, recognizes particulates as cancerous), should the topic arise when negotiating with Prusskov.     

[24] Regardless of how one feels about barbiturates, there is a sustained marketplace for these drugs. ITP only sells barbiturates t internationally recognized governments, governments that have enacted their own rule of law that governs their country.    

SECTION 2:

SOLUTION

Question 1:

There are various principles that are used for giving decisions as an executive of ITP. They are:

Utilitarianism – The principle of Utiilatarism is one of the moral ethics that deals with the most appropriate action. According to the principle of Utilitarianism, the most appropriate action has the power to increase the utility. In fact, it is the summation of all the good results that arise from a particular work. This moral principle is the other name for consequentialism that determines the outcomes or the consequences of any type of action (Beauchamp et al. 2004, p.72).  The principle of Utilitarianism takes into account the interests all each and every person.  The Iron Throne pharmaceuticals should be involved in the appropriate action that would be beneficial for all the sections of the society. It should launch appropriate for the patients who require anaesthetics drugs during their surgery and it should also produce sufficient amount of medicines for the cardiac patients.  The principle of Utilitarianism would help the Iron Throne pharmaceuticals to undertake a course of action for the patients of anaesthetic drugs and the patients with the cardiac diseases. Such course of action will give the good result i.e. it would reduce the number of people who die due to stroke or heart diseases in Canada. 

The principle of justice- The principle of justice state lays down the rule which states that each and every person should be treated equally and fairly in an organisation.  The principle of justice is more applicable to pharmaceutical or healthcare companies which state that every section of the society has the right to enjoy the benefits or face the burdens.  This means that the material and the service benefits should be provided equally to each and every person.  According to this principle, the Canadian government should treat all the pharmaceutical companies equally (Jones et al. 2007, p.137). It should not give more financial benefits to ITP as it increases Canada’s image on an international ground.  Besides, the case states that Iron Throne pharmaceuticals are the greatest employer of scientists and chemical engineers in North America. According to the principle, it should not prefer scientists or chemical from North America but it should give equal opportunities to scientists from all over the world who have similar efficiencies. Besides, the case contains that Iron Throne pharmaceuticals have paid attention to vaccination programs. Based on this principle it can be said that Iron Throne Pharmaceuticals should not only provide benefits through vaccination programs but to also treat other aspects equally.

The principle of Care- The principle of care states that Iron Throne pharmaceuticals should take care to all the sections of the society in a particular way in which the various sections of the society would like to be treated. According to this principle, Iron Throne pharmaceutical company is a care service provider who produces anaesthetic medicines, barbiturates and other vaccines along with medicines that can help cardiac patients (Robinson, 1997).  As a pharmaceutical company, Iron Throne Pharmaceuticals should produce these medicines as per as the market demand or in other words, it should produce each and every category of medicines as much demand by the customers.  Besides, the case states that ITC was caught for causing pollution during the production of barbiturates. The case states that the employees of the company were exposed to various types of airborne pollutants. In the employees inhale such pollutants then their lungs would get damaged and they can also face the untimely death. Regarding this, the principle of care would help the ITP treat the employees with care which they expect from their company.  The case also states that Iron Throne pharmaceuticals had not taken the consent of people in some place of developing would and had conducted certain experiments by using risk hepatic drugs. Under such circumstances, it is the duty of ITP to take care of the individuals whose body had been used for clinical experiments of risky hepatic drugs.

Virtue ethics- Virtue ethics is regarded as one of the most important ethics that is very essential in theory of normative ethics.  Such ethics lays down certain moral values which possess a contrast with the duties of an individual. According to this moral standard, the Iron Throne pharmaceutical should conduct its business in an ethical way. In no way, it should perform any misdeeds for its own selfish interests (West, 2016, p.199). Besides, while conducting the business it is the duty of the company to look at all the aspects and their development.  In the case, it has been argued by Targaryen that ITP has been involved in the export of the banned drugs and it prohibits the other companies to export their drugs. Besides, the company is producing certain anaesthetics that are used in unnecessary surgery even if they are not needed. The principle of virtue ethics states that Iron Throne Pharmaceuticals should not resort to such an act which would restrict the growth of other pharmaceutical companies in Canada and North America. 

Moral Rights- These are the rights of different workers who have taken the copyright of their intellectual property assets. These types of rights prevent the pilferage and the imitation of a work of a particular person.  These rights generally provide protection to the intellectual property assets like goodwill. These rights are described in different ways by different countries. According to VARA, the moral rights are generally known as the right that belongs to an author for his creative or visual work. There are different paintings, music sculptures whose creativity has been preserved as per as this right. Sometimes this right also helps to protect the intellectual property assets like the goodwill, patent etc (Hoffman et al. 2014). As per as this right the Iron Throne pharmaceuticals company has patent offices in Prosskov. The patent office in Prosskov should ensure that the Iron Throne Pharmaceuticals Company should not imitate the process or the techniques for the production of any types of drugs like an anaesthetic, cardiac drugs or barbiturates from any other company if the process of manufacturing such drugs has been patented.  Besides, this right also states that the ITP Company should not restrict the export of any medicine belonging any other pharmaceutical company in the Canadian market. It is the moral right of every company to sell their product and gets a patent for their invention of production techniques through research and development.

Egoism- Egoism can be stated as the moral theory describing the behaviour of a person.  There are different types of egoism known as psychological egoism, ethical egoism and rational egoism. The concept of egoism, in fact, determines the most common objective of each and every person (Held, 2017, p.53). According to this principle of Psychological egoism, a person looks at his own interest. Normative part of egoism states that an individual tells what he or she should do.  In this case, Iron Throne Pharmaceuticals is a leading pharmaceutical producer in the Canadian market. It was responsible for conducting certain operations which were criticised by the others.  The company had tried to dominate the entire Canadian market and capture the industry which its excellence. The company has been trying to pull up itself by finding various loopholes in the exports of banned products. Besides, the company has done various clinical tests of various drugs. Besides, the company has performed various research and development activities for its products. Such activities describe the behaviour of the company as suggested by the principle.

Question 2:

The opinion of Milton Freedman is based on the corporate social responsibilities of business entities.  The business should take into account the interests of the common people while taking corporate decisions (Friedman, 2017). Milton Freedman would not agree with the position because according to him responsibilities are the most important thing. A business can flourish if it is able to follow different types of corporate social responsibilities. He fully disagrees the format of research and development of the Iron Throne Pharmaceuticals as because the company has made clinical tests on the patients with risky drugs. Moreover, the patients did not know that they were being given certain risky medicines. Besides, usage of cheaper labour leads to exploitation of the labourers as they labourers do not get proper money and healthy workplace. According to him, the labourers give full efforts to the production of the goods and the services but the usage of cheaper labour cause's exploitation of labour and such policies are not supported by the corporate social responsibility (Friedman, 2017).  Besides Freedman disregards the sale of barbiturates because the Prusskovian offices do not have such rules and regulations and if the barbiturates are sold from these offices then the there would be no legal restriction on the company. 

Question 3:

There are different concepts that are relevant to the study of the Iron Throne pharmaceuticals in Canada. In fact, the company has tried its best to flourish its pharmaceutical business within Canada and in the international market. There are certain good measures that the Iron Throne Pharmaceuticals Company has taken. The corporate social responsibility states that it is one of the responsibilities of the company to absorb the entire workforce (Hopkins, 2017, p.83). In the case, it is found that the company have created several employments for the scientists and the chemical engineers in North America. There are various scientists and chemical engineers who have been employed in various laboratories in North America. The company has also incurred costs in providing training to the employees generally from the community of the aboriginals. By this, it lays down the principle of equality. The company had provided equal opportunities to the higher class employee groups as well as lower class employee groups (Hopkins, 2017, p.83).  Moreover as suggested by the principle of the duty of care the company has struggled to make the ACE Inhibitors which would reduce the blood cholesterol level and widen the arteries reducing the chances of a heart attack.  The company has taken various measures to increase its business but all the business strategies that were taken by the board were not moral. There were certain immoral and unethical strategies that were adopted by the board of the company regarding the production and the sale of barbiturates. The company has decided to shift the production of barbiturates to Prusskovian area because there were no strict trade laws regarding exports of barbiturates. This situation is related to the case of Takeda pharmaceuticals in which the company had to pay millions because the medicine manufactured by Takeda pharmaceuticals were dangerous and could cause bladder cancer. Similarly, in this case, the Iron Throne pharmaceuticals had made an attempt to the sale of barbiturates through Prusskovian offices.  The Company had not taken strategies to keep the workers in a clear and healthy workplace. This issue is similar to the case of Mc Donald's and Lie beck. In this case, Mc Donald had failed to follow the social responsibility for giving a proper workplace (Rutherford, 1998, p.72). Similarly, in this case, it is found that the workers in the production factories of Iron Throne Pharmaceuticals had not given safe workplace to the workers and they had continuously inhaled the airborne pollutants.