Ethics issues and their implications

Ethics

Business Ethics

The foundation of business ethics is the definition of morality and the development of a series of cognitive frameworks which can be used in the navigating of business decisions over time. Of the many aspects and theories of ethics, the normative ethics of business are most often relied on for defining shared moral values, often formalized into common law. Ethics also are defined from their application as well, specifically to situations and to judgments people make regarding the direction of their lives and the decisions they make. Finally ethics are often used to define the philosophy of societies, often serving as the basis of their laws and regulations for how business is transacted and rights protected. Ethics then can be tactical in scope, defining how people work with and treat one another, and also strategic to the point of being philosophical as well.

Ethical Issues that Impact the Community in the Pharmaceutical Industry

There are many issues that are influencing the community and pharmaceutical industry. The first and most pervasive is the lack of ethics in the area of financial reporting, specifically where transactions involving government funds are concerned (Verschoor, 2006). The Sarbanes-Oxley Act of 2002 did little to alleviate the widespread corruption in the area of pharmaceutical drug company's reporting of revenues so that investors could not readily understand their claims of capturing greater numbers of customers than they actually did (Verschoor, 2006). This lack of financial reporting also has created a lack of visibility into just how the costs of new drugs, often put at $800M to produce, is accurately being reported or not (Verschoor, 2006). Pharmaceutical drugs are among the most expensive products to produce globally and as a result have a major impact on the profitability of these firms. Without accurate financial reporting of these costs many investors have no idea of whether the companies are doing as well as they report they are.

The second most troubling issue that is impacting the community and the pharmaceutical industry is the lack of credibility of scientific research and its implications on the new drug development and marketing strategies of pharmaceutical firms (Verschoor, 2006). This continues to be a major concern specifically for government regulators who have seen pharmaceutical industry spend up to $5.5B a year to promote drugs to physicians, often citing inaccurate or falsified research (Verschoor, 2006). Not only does this impact the physician's credibility if the drugs do not perform, it also harms the patient.