Management Across Cultures - Pharm Companies, Intellectual Prop and the Global Aids Epidemic

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Pharmaceutical Companies,
Intellectual Property, And the Global AIDS Epidemic

National American University

Abstract
No business opens its doors with the expectation of loss. The pharmaceutical world is a business and, as with any business, profits are key. Often the business world conflicts head on with the ethical world. This is the case here, especially as we examine the question of responsibility, intellectual property and morality. As we consider the rights of a business and its responsibility to share proprietary information in the face of a global AIDS epidemic, it is difficult to look at this situation through business eyes. A sense of morality must prevail and this is where the conflict occurs. Do pharmaceutical companies have a responsibility to distribute drugs for free or at low cost in developing countries? How does intellectual property fit in to this quandary?   What impact would South Africa’s decision to levy duties on drugs in the country have on the international distribution of drugs?   Was the change that provided patent protection for pharmaceutical companies an appropriate change or a dangerous precedent? Was it necessary to relax intellectual property rules in order to ensure that adequate supplies of AIDS medications would be available for distribution in the developing world? What role do multi-national corporations have in providing funding or other assistance to international organizations such as the Global Fund?   Perceptions guide as one considers the answers to these questions. Arguments can be made for and against each answer. Should morality rule or profits? Ultimately, this is one world and, no matter the borders, everyone must live together, taking care of each other. The question is, “How do we do that and still take care of ourselves?”

Pharmaceutical Companies, Intellectual Property,
And the Global AIDS Epidemic
Acquiring affordable and effective medical treatment in the current economic situation and political climate is perhaps one of the most volatile topics of conversation today. As the global impact of this topic is examined, it becomes an ethical argument as well. Any business that hopes to stay alive in today’s economy, must commit to a profitable bottom line. PHARMACEUTICAL COMPANIES

Medical providers and pharmaceutical companies alike have long been known to charge exorbitant prices for services and products rendered. There are many steps involved in the production of a new drug, including laboratory research and development, FDA approval as well as distribution and education to the medical community. The price of such an endeavor for only one drug is said to average $800 million and take ten to fifteen years to complete. Even with drug prices as high as they are; only 30 percent of drugs marketed bring revenues in to break even on their average research and development (R&D) costs (Luthans & Doh, 2012, p. 96). The protection of a patent, allows the drug companies to charge high prices with the hope that revenue will be generated to recuperate R&D expenses. Any profits realized are, of course, shared with investors and used for additional research as medicines are further refined. Pharmaceutical companies tend to focus their research and development on medications that treat diseases that are more prevalent in the developed world rather than those in less developed countries (LDCs). The logic in that business decision is that the developed world has the money to finance the research and ultimately pay for the completed product. In fact, it has been reported that around 90% of the money spent on health R&D focuses on medical conditions responsible for only 10% of the world’s burden of disease (Benatar, 2000). A commitment to shareholders essentially governs the direction of the organization, as it is with any business. Sadly, the situation becomes an issue when a patent, designed to protect the creator of the product,...
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