In the former approach, tradable goods, money or services are exchanged between buyers and sellers at a rate that is agreeable to all parties. This approach assumes both the buyers and sellers have enough money, services or goods to have their needs met. The latter approach, public provision, is when all is available to those on an as-needed basis.
The Pharmaceutical and Manufacturing Association warns that whenever there is government control of prices it only has a negative impact on those who are in need of being helped: 1) When funding for new medical technology, cures for diseases and research and development are diverted to more lucrative economic areas; 2) Incentives to enter the pharmaceutical industry decline; 3) More restrictions are placed on providers; 4) the quality of medical care suffers and 5) This leads to a rationing of care. Instead, the association says there has to be a healthcare reform that includes such elements as: expansion of Health Maintenance Organizations and Preferred Provider Organizations; more emphasis on preventative measures; requiring of second opinions for surgery; living wills; drug utilization review systems; encouragement of medical innovation; greater research on outcomes of alternative treatments; greater patient education; tort reform; imposition of substantial deductibles or co-payments and voluntary industry measures to limit drug price-increases (Spinello, 2007).
Spinello (2007) instead looks at the concept of the free market as the most ethical approach to drug costs. He raises the questions as to whether pharmaceutical companies are obligated to accommodate the neediest customers when establishing prices in accordance with the principles of justice. or, may they restrict only to those who can pay the full price? Secondly, if price controls are established, will they work in practice to achieve the ends of justices or bring about negative results as the Pharmaceutical and Manufacturing Association has warned? Spinello argues that the principles of distributive justice justify the implementation of price controls. The claim is often made, he states, that such high prices and resulting exorbitant resultant profits are unnecessary. For example, it is known that the price of azidothymide or AZT produced by Burrroughs-Wellcome Company can frequently cost as much as $6,500 a year, which is unattainable for many AIDS victims, especially those with inadequate insurance coverage. Burroughs-Wellcome has continued to give any information on how it came up with this price. It is believed that the company is pricing this drug the same as an expensive cancer therapy. The difficulty is knowing the cost of the product. As Clarence Walter once stated, "No other area of managerial activity is more difficult to depict accurately, assess fairly, and prescribe realistically in terms of morality than the domain of price.
Pharmaceutical companies could easily offer less costly products for numerous drugs on the market notes Spinello (2007). Every business is entitled to a reasonable profit, but is it morally wrong to charge such high prices even when the market is willing to pay that price? Is it ethical to profit at the expense of those who are suffering? Should other viewpoints be considered, such as the concerns of the sick, especially since they have so much at stake? That is, states Spinello, as with many other business decisions, there seems to be a distinct tradeoff between major financial performance vs. human caring and fairness. If companies choose to be attentive and responsible social agents, they must start to develop a broader view of social obligations and responsibility. They need to see people who have a stake in these decisions. This stakeholder model, gives organizations the ability to link strategic decisions such as pricing with social and ethical considerations. By recognizing the rights of the stakeholders, such as employees and consumers, managers will better appreciate all negative and positive consequences of their decisions. In addition, an honest understanding of the stakeholders will make them analyze the economic and human implications of those decisions and become more responsible social agents. Organizations that take this route with the aim of moral and social responsibility will adopt the moral point-of-view, which makes them strongly committed to positively view the distinct interests of others, including the variety of stakeholder groups.
Given the two diverse approaches of the pharmaceutical association and the stakeholder approach, what is the answer? The concern by the drug companies is that price constraints will make the situation even worse than it is now. However, the principles of justice that govern society as much as free enterprise necessitates that economic decisions should be made that support and protect the disadvantaged. Will the pharmaceutical companies ever recognize the morally right decision when weighing the cause of supply or demand vs. justice of people who will die without receiving their medicine because they could not afford the high prices?
This same type of dilemma occurs regularly with marketing of products. People in marketing have normally weighed the importance of practices and products based on the possibility of something being. Kang and James (2007) stress that it is also essential to look at the introduction of products and practices from a societal viewpoint. That is, "Should a product be sold?" The first idea of determining salability reflects a managerial orientation and what has to be accomplished in the sale of a product. Marketers have traditionally felt that their actions are predictably in the best interest of consumers. In this exchange process, the organization makes a reasonable profit and consumers get the product they desire and thus, in the best of all worlds, everyone is satisfied. While the basic role of marketing is to help organizations generate profits by satisfying customers marketing practices do have many other effects.
The second idea reflects a societal orientation and what will be the consequences of the product sale. Although the social marketing concept was first suggested in 1972, there has since been little written to explain it or in support. Some have seen the marketing concept as a potential social problem, or a force working toward the production and distribution of "bads" as well as "goods" (Holbrook and Hulbert, 2002). Marketers most often focus on the products and markets and ignore the social impact of their activities and recognizing the long-term affects of their decisions on individuals and society as a whole by fulfilling short-term desires.
What can companies do to identify key societal concerns and find ways to address them? Kang and James (2007) theorized a societal orientation based on a review of literature and qualitative interviews with organizational managers. Each of the managers was sent a package and asked to consider two separate topics: 1) the subject of a societal orientation in relation to their respective organizations, and 2) specific concern(s)/issue(s) related to the impact of a societal orientation. These questions were used as a means for the follow-up interviews. In addition to conceptualizing a societal orientation construct, the researchers hoped to delineate potential domain(s) comprising the societal orientation construct.
The construct was conceptualized as "attention to the long-term well-being of individuals and society at large by enhancing positive impacts from and reducing negative effects associated with production and consumption of a product." As a result, the authors suggest five domains that make up a societal orientation: physical consequences, psychological well-being, social relationships, economic contribution, and environmental consciousness..By identifying these specific domains of a societal orientation, it is easier to gain a greater understanding of the construct and offer direction for organizations on the ways to foster a societal orientation. Future research should focus on developing an measurement to analyze whether organizations do incorporate a societal orientation in their operations by looking for these parameters. There have been some scales developed to measure various elements, such as social responsibility, ethics, and environmental orientation, associated with a societal orientation (Kang and James, 2007).
Although such scales can offer a better understanding into the way of developing a means to measure an organization's societal orientation, they are theoretically and psychometrically inadequate for completely assessing the constructs proposed in this study. Further, by developing an instrument to measure whether an organization faces the five domains, it may be possible to identify the key domains an organization should address, or at the least determine which of the domains the organization should first strive to improve. By paying increased attention to the roles organizations play in society, it would help leaders to better acquaint themselves wit the definition of societal orientation is and learn how to operate with such an orientation (Kang and James, 2007).
The ultimate goal is rather than considering that such an orientation is antagonistic to an organization's financial goals, it is possible to observe that an organization seeks to ensure the well-being of buyers and the society at large.
Promoting a societal orientation does not mean that a company becomes a not-for-profit agency that is focused on providing social services. With its societal orientation in place, the organization strives to balance issues of company financial success, consumer want…