Managing Ethical Legal and Reputation Risks管理伦理，法律和声誉风险.docVIP

PAGE 2 PAGE 17 Chapter – VII Managing Ethical, Legal and Reputation Risks “The Indian market is a peculiar one because of the status of intellectual property. It’s not our intention to launch new drugs in the Indian market in the near future because it’s a pointless exercise. Any generic house could copy them and put them in the market place and sell them at a lower price. The dynamics of the market will not change until there are clear rules about intellectual property rights. So, for a company like ours, which is a prescription medicine-based company, India will become really attractive only when we get some I.P.R. protection.” -Sir Richard Sykes, Chairman, Glaxo SmithKline Business Today, February 3, 2002, p. 68. Business Today, February 3, 2002, p. 68. Understanding legal and ethical risks In 1997, leading multinational pharmaceutical companies came under fire for overpricing AIDS medicines. With 20% of its population testing positive for AIDS, the South African government decided to allow import and production of cheap generic substitutes for patented products. Merck and other leading pharmaceutical companies complained that this was a clear violation of intellectual property rights. Initially, the US government supported them. But after a massive round of negative publicity, the government backed down. The pharmaceutical companies announced they would sell AIDS drugs at production cost in developing countries. This incident clearly brought out the pressures on companies, to accept high standards of social responsibility in today’s business environment. Even though some people like the famous economist, Milton Friedman have argued that the only real aim of a company is to make profits, what needs to be understood is that without a strong ethical performance, profits would not be possible. Unethical companies face resistance and hostility from society. This builds up over a period of time and finally brings the company down. Quite clearly, organisations h